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Establishment industries borrows $800million at an interest rate of 7.6%. What is the annual interest tax shields? if the establishment expects to maintain this debt level into the far future, what is the PV of interest tax shields? How would your answer change if the debt level will only be for the next 10 years? Establishment will pay tax at an effective rate of 37%? Consider market risk premium of 5.5% and tax rate of 40%.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92084020

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