What Is the Present Value of the Tax Shield to a Firm

question 69

Multiple Choice

What is the present value of the tax shield to a firm that has a capital structure consisting of $100 million of perpetual debt and $180 million of equity, if the average interest rate on debt is 9%, the return on equity is 13%, and the marginal tax rate is 40%?

• A) $72 million
• B) $40 million
• C) $60 million
• D) $3.6 million

Comprehend the importance of ethical guidelines in research.

Recognize the variety and purposes of different types of journal articles within psychology.

Acknowledge the empirical nature of psychology and its reliance on scientific methods.

Describe the process and significance of peer review in the publication of research findings.