Question: Markum Enterprises is considering permanently adding an additional $175 million of debt to its capital structure. Markum's corporate tax rate is 38% a. Absent personal
Markum Enterprises is considering permanently adding an additional $175 million of debt to its capital structure. Markum's corporate tax rate is 38% 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 30% on interest income, and a tax rate of 25% on income from the new debt? from dividends and capital gains what is the value of the interest tax shield
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