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QUESTION
How do you compute annual interest tax shield?
How do you compute annual interest tax shield? I keep getting this problem wrong
Ernie's has 4,200 bonds outstanding with a face value of $1,000 each, a market value of $1,060 each, and a coupon rate of 7.6 percent. What is the amount of the annual interest tax shield if the tax rate is 35 percent?
