Bay Transport Systems (BTS) currently has $20 million in debt outstanding. In addition to 9.0%...
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Finance
Bay Transport Systems (BTS) currently has
$20
million in debt outstanding. In addition to
9.0%
interest, it plans to repay
5%
of the remaining balance each year. If BTS has a marginal corporate tax rate of
38%,
and if the interest tax shields have the same risk as the loan, what is the present value of the interest tax shield from the debt?
The present value is
$nothing
million. (Round to two decimal places.)
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