In recent years, Haverhill Corporation has averaged a net income of $10 million per year on net sales of $100 million pe
Posted: Mon Nov 15, 2021 5:09 pm
In recent years, Haverhill Corporation has averaged a net income
of $10 million per year on net sales of $100 million per year. It
cur-rently has no long-term debt, but is considering a debt issue
of $5million. The interest rate on the debt would be 6 percent.
Haverhillcurrently faces an effective tax rate of 35 percent. What
would beHaverhill’s annual interest tax shield if it goes through
with the debt issuance?
of $10 million per year on net sales of $100 million per year. It
cur-rently has no long-term debt, but is considering a debt issue
of $5million. The interest rate on the debt would be 6 percent.
Haverhillcurrently faces an effective tax rate of 35 percent. What
would beHaverhill’s annual interest tax shield if it goes through
with the debt issuance?