Use the Information for the Question(s) Below

question 55

Essay

Use the information for the question(s) below.
KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt. KD has had consistently stable earnings, and pays a 35% tax rate. Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares.
-Assume the following tax schedule:
Personal Tax Rates

Considering the effect of personal taxes,calculate the PV of the interest tax shield provided by KD's recapitalization in 2005.

Grasp the different persuasive techniques used in sales and marketing.

Understand the general principles of crafting persuasive business and sales messages.

Identify the role of emotional and rational appeals in sales messages.

Recognize the importance of choosing the appropriate medium and structure for sales messages.

---

Definitions:

Legal Liability

Legal liability involves being responsible under law for a specific action or outcome, often related to damages or restitution.

Limited Liability Company

A company organization that blends the direct taxation features of a partnership or sole proprietorship with the protective limited liability characteristic of a corporation.

Service Business

A type of business that provides intangible products, such as expertise, experience, or access, rather than physical goods.

Alternative

A term used to describe an option or choice among multiple possibilities, often referring to solutions, methods, or investments.