A company issues a one-year bond with a face value of $25 million. The bond has a coupon rate of 8%. What are the minimum (accounting) earnings that the company has to have in order to fully capture the debt tax shield.© BrainMass Inc. brainmass.com June 4, 2020, 12:46 am ad1c9bdddf
The earning before interest and tax should be equal to the interest amount so that the earnings ...
The solution explains how to determine the minimum earnings so as to fully capture the debt tax shield