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Braxton Enterprises currently has debt outstanding of 65 million and an interest rate of 7%. Braxton...

Braxton Enterprises currently has debt outstanding of 65 million and an interest rate of 7%. Braxton plan to reduce its debt by repaying 13 million at the end of each year for the next 5 years. If Braxton's marginal corporation tax rate is 30%. What is the interest tax shield from Braxton's debt in each of the next five years.

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Interest tax shield from Braxtons debt in each of the next five vears Particulars Debt Interest on Debt for each year @7% (A) Tax Rate (B) Tax Shield (A*B) in Millions) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total 65.00 4.55 30% 1.3650 52.00 3.64 30% 1.0920 39.00 2.73 30% 0.8190 26.00 1.82 30% 0.5460 13.00 0.91 30% 0.2730 30% 4.0950

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