Tax Shield Value

Wilde Software Development has a 12% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 2% rate after Year 3. Wilde's tax rate is 25%.

1. Year 1Year 2Year 3Interest expenses$70$100$130What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent.

$_______________________

1. What is the total value of the interest tax shield at Year 0? Do not round intermediate calculations. Round your answer to the nearest cent.

$ _________________________