The BSC company planned to raise $2.5 million in perpetual debt at 11%. However, they just got an offer from the governor of a nearby state to increase funding for them to 8% if they locate a new facility in that state. What is the total value added of debt financing if the tax rate is 34% and the government subsidizes the loan to the company?

Answer rating: 100% (QA)

To determine the total value added of debt financing we need to consider the difference in interest ... View the full answer