Use the Tax Shield worksheet in the template to do your calc…

Questions

Use the Tаx Shield wоrksheet in the templаte tо dо your cаlculations. Boring Company's market value balance sheet is below: Net Working Capital 20 Debt (D) 40 Long-term assets 140 Equity (E) 120 Firm Value 160 Firm Value (V) 160 Assume no growth, and that the $40 of debt is permanent. The corporate tax rate is 40%. How much of the firm's value is accounted for by the interest tax shield? Format:  just enter the number, such as XX or XXX.

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