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    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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    https://brainmass.com/business/bond-valuation/present-value-tax-shield-336799

    Solution Summary

    The solution determines the present value of the tax shield.

    $2.19

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