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Legitron Corporation: Interest Tax Shield Benefit

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Legitron Corporation has $365 million of debt outstanding at an interest rate of 10 percent. If Legitron is subject to a 34 percent marginal tax rate, the amount of the tax shield on that debt for this year is $_________.

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This solution illustrates how to compute the tax shield for interest.

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The amount of the tax shield is the tax reduction resulting from ...

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