In the Year Ending October 2007,Walmart Paid Out $1,929 Million

question 99

Essay

In the year ending October 2007,Walmart paid out $1,929 million as debt interest.
How much more tax would Walmart have paid if the firm had been entirely equity-financed? What would be the present value of Walmart's interest tax shield if the company planned to keep its borrowing permanently at the 2007 level? Assume an interest rate of 6% and a corporate tax rate of 35%.

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Definitions:

Cerebellum

A part of the brain located behind the top part of the brainstem, responsible for coordination of movements and balance.

Accessory Nerve

A cranial nerve that supplies the sternocleidomastoid and trapezius muscles to control swallowing, head, neck, and shoulder movements.

Cranial Component

Refers to the parts or elements that pertain to the skull or cranium, often relating to the brain or cranial nerves.

Lateral View

An angle or perspective from the side of an object or subject, particularly in medical imaging or anatomical illustrations.