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  3. suppose the corporate tax rate for company a is 47

Suppose the corporate tax rate for Company A is 47%. Consider a firm that earns...

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Finance

Suppose the corporate tax rate for Company A is 47%. Consider a firm that earns $1,028 before interest and taxes each year with no risk. The firms capital expenditures equal its depreciation expenses each year, and it will have no changes to its net working capital. The risk-free interest rate is 4.59%.

Suppose the firm makes interest payments of $555 per year. What is the value of debt?

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