The June Bug has a $270,000 bond issue outstanding that matures in 22 years. These bonds have a 7.6 percent yield to maturity. The tax rate is 39 percent. What is the amount of the annual interest tax shield?
The June Bug has a $270,000 bond issue outstanding that matures in 22 years. These bonds have a 7.6 percent yield to maturity. The tax rate is 39 percent. What is the amount of the annual interest tax shield?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The June Bug has a $270,000 bond issue outstanding that matures in 22 years. These bonds have a 7.6 percent yield to maturity. The tax rate is 39 percent. What is the amount of the annual interest tax shield?
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