Question: Markum Enterprises is considering permanently adding an additional $170 million of debt to its capital structure.Markum's corporate tax rate is 38%. a. Absent personaltaxes, what

Markum Enterprises is considering permanently adding an additional $170 million of debt to its capital structure.Markum's corporate tax rate is 38%.

a. Absent personaltaxes, what is the value of the interest tax shield from the newdebt?

b. If investors pay a tax rate of 45% on interestincome, and a tax rate of 20% on income from dividends and capitalgains, what is the value of the interest tax shield from the newdebt?

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