Question: Firm A borrowed a 5 year , nonamortizing loan at a cost of 50%. Firm paid total flotation cost of $10,000 at the time of

Firm A borrowed a 5 year , nonamortizing loan at a cost of 50%. Firm paid total flotation cost of $10,000 at the time of borrowing.

The flotation cost will be amortized over 5 year .

Corporate tax rate is 30% .

What is the annual flotation cost tax shield?

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