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Safeco Inc has no debt, and maintains a policy of holding $15 million in excess...

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Finance

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Safeco Inc has no debt, and maintains a policy of holding $15 million in excess cash reserves, invested in risk-free Treasury securities. If Safeco pays a corporate tax rate of 39%, what is the cost of permanently maintaining this $15 million reserve? Hint what is the present value of the additional taxes that Safeco wil pay

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