Do fast answer of this accounting questions Apex Corporation has $250,000 of debt outstanding that is selling at par and has a couponrate of 6%. If the tax rate is 25%, what is the present value of the tax shield on debt?A. $45,500B. $62,500C. $15,000D. $3,750

Step 1: Definition of Present Value of Tax ShieldThe Present Value of the Tax Shield (PVTS)…

Answered: Apex Corporation has $250,000 of debt…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter17: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 3P

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Apex Corporation has $250,000 of debt outstanding that is selling at par and has a coupon rate of 6%. If the tax rate is 25%, what is the present value of the tax shield on debt? A. $45,500 B. $62,500 C. $15,000 D. $3,750