The Present Value of Tax Shield
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Southern Fried Foods has a $12 million bond issue outstanding with a coupon rate of 6.75 percent and a yield-to-maturity of 7.27 percent. What is the present value of the tax shield if the tax rate is 35 percent?
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Solution Summary
The solution determines the present value of the tax shield.
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
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