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QUESTION
Ruttabul Ltd has $250 million of debt outstanding at an interest rate of 11 per cent.
Ruttabul Ltd has $250 million of debt outstanding at an interest rate of 11 per cent. What is the present value of the debt tax shield if the debt will mature in 5 years (and no new debt will replace the old debt), assuming that Ruttabul is subject to a 30 per cent company tax rate?
