Multiple Choice
The management of Graphicopy is trying to determine how much debt they should have in their capital structure. If they sell $500,000 in perpetual bonds with a 9% coupon, what would be the present value of the tax shield? Assume the marginal tax rate is 35%.
A) $18,750
B) $29,250
C) $175,000
D) $45,000
Correct Answer:
Verified
Correct Answer:
Verified
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