Suppose a project financed via an issue of debt requires five annual interest payments of $20 million each year. If the tax rate is 30% and the cost of debt is 5%, what is the value of the interest rate tax shield?
A)$22.25 million
B)$22.67 million
C)$25.98 million
D)$32.35 million

Question

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The Answer of Suppose a project financed via an issue of debt requires five annual interest payments of $20 million each year. If the tax rate is 30% and the cost of debt is 5%, what is the value of the interest rate tax shield?
A)$22.25 million
B)$22.67 million
C)$25.98 million
D)$32.35 million

Suppose a Project Financed Via an Issue of Debt Requires