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Business, 26.11.2019 19:31 manny2275

Ford expects to earn a free cash flow of $100, starting in 1 year, forever. the discount rate on the assets of the firm is 18%. further, ford has issued debt of $1,000 at an interest rate and yield-to-maturity of 5%. ford will perpetually roll this $1,000 in debt over, so that it always has a constant $1,000 in debt forever and always expects to pay 5% interest on this debt. finally, ford has a tax rate of 30%. what is the present value of ford’s interest tax shield?

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Ford expects to earn a free cash flow of $100, starting in 1 year, forever. the discount rate on the...
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