Question 7 (of 10) 7· value 10.00 points Incite Co. has a 36 percent tax rate. I

Question

Question 7 (of 10) 7· value 10.00 points Incite Co. has a 36 percent tax rate. Its total interest payment for the year just ended was $42.2 million. What is the interest tax shield? (Do not round intermediate calculations and enter your answer in dollars, not millions Interest tax shield $ References eBook & Resources Worksheet Learning Objective: 13-02 Analyze the impact of taxes and bankruptcy on capital structure choice Difficulty: 1 Basic Section: 13.4 Corporate Taxes and Capital Structure

Explanation / Answer

interest tax shield = total interest payment * tax rate

= 42.2 million * 36%

= 15.192 million

= 15192000

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