Explore BrainMass

Explore BrainMass

    Debt tax shield

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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
    https://brainmass.com/business/accounting/debt-tax-shield-359232

    Solution Preview

    The earning before interest and tax should be equal to the interest amount so that the earnings ...

    Solution Summary

    The solution explains how to determine the minimum earnings so as to fully capture the debt tax shield

    $2.19

    ADVERTISEMENT