Question $6$

$2$ Points

Asker Inc. is an all$-$equity funded firm that is considering borrowing $$1$ billion at a market interest rate of $6\%.$ If the loan is a balloon payment loan for $10$ years $($only interest paid for the next $10$ years and the principal at the end of year $10)$ and Asker faces a $40\%$ marginal tax rate, what is the value of the tax benefits that Asker will get just from the ten$--$year loan?

$$24$ million

$$176\mathrm{.}64$ million

$$240\mathrm{.}00$ million

$$264\mathrm{.}96$ million

$$1$ billion