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Author Question: In the year just past (Year 1) Kaos Corp. had no debt. Today is January 1 of Year 2. Kaos is ... (Read 66 times)

melina_rosy

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on: Apr 25, 2021
In the year just past (Year 1) Kaos Corp. had no debt. Today is January 1 of Year 2. Kaos is considering a plan to sell bonds worth $25B and use the proceeds to repurchase 2.5B shares (on the open market at $10/share). If Kaos maintains this new level of debt in perpetuity, then what is the present value of the resulting interest tax shields? Assume that the debt is sold immediately, that the bonds are a perpetuity, and that interest is paid at the end of each year. Assume that the coupon rate on the bonds is 6% and that the tax rate is 15%.
◦ $0.23B
◦ $3.75B
◦
$6.0B

◦ $21.25B
◦ $25B
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Marked as best answer by melina_rosy on Apr 25, 2021

Ksanderson1296

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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melina_rosy

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Reply 2 on: Apr 25, 2021
Thanks for the timely response, appreciate it

ebonylittles

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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