Question: Markum Enterprises is considering permanently adding an additional $151 million of debt to its capital structure Markum's corporate tax rate is 21% a. Absent personal

Markum Enterprises is considering permanently adding an additional $151 million of debt to its capital structure Markum's corporate tax rate is 21% a. Absent personal taxes, what is the value of the interest tax shield from the new debt? b. If investors pay a tax rate of 37% on interest income and a tax rate of 20% on income from dividends and capital gains, what is the value of the interest tax shield from the new debt? ET2) a. Absent personal taxes, what is the value of the interest tax shield from the new debt? In the absence of personal taxes, the value of interest tax shield from new debt should be $ 31,71 million, (Round to two decimal places) b. IT investors pay a lax rate 07 37% on interest income and a tax talel bf 20%orlincome from dividends and capital gains, what is the value of the interest tax shield from the new debt? I Tinvestors pay a tax rate of 37% on interest income, and a tax rate of 20 ori income from dividends and capital gains, the value of the interest tax shield from new detit should be :) million. (Round to two decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
