A firm issues debt of 1 million at an interest rate of 10, Ask an Expert

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A firm issues debt of 1 million at an interest rate of 10%. The debt has a 10-year maturity, and the first interest payment is due next year. The principal repayment and the last interest payment will be made at the end of year 10. If the firm is in the 35% tax bracket and the appropriate discount rate is 10%, what is the present value of the tax savings?

A. $215,060

B. $236,569

C. $245,783

D. $368,674

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92352115

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