Lilly's company has an equity cost of capital of 10% and its debt cost of capital was shown to be 7%. The company also h

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answerhappygod
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Lilly's company has an equity cost of capital of 10% and its debt cost of capital was shown to be 7%. The company also h

Post by answerhappygod »

Lilly's company has an equity cost of capital of
10% and its debt cost of capital was shown to be 7%. The company
also has a corporate tax rate of 20%. What is the value of the
company tax shield if the company wants to maintain a
debt-to-equity ratio of 0.60? Must be in millions. Please show your
work.
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