If a firm borrows $50 million for one year at an interest rate of 9%, what is the present value of the interest tax shield? Assume a 21% percent marginal corporate tax rate.
Interest for one year=$50 million*9% =$4.5 million
Hence tax shield for the year=Interest for the year*Tax rate
=4.5*21%
=$0.945 million
Hence the present value of the interest tax shield=0.945/1.09
=$0.867 million (Approx)
Under the brand new tax slab introduced by using the Finance Ministry, organizations with annual turnover up to Rs 400 crore and no longer looking for any incentives or exemptions want to pay 22 consistent with cent tax together with applicable cess and surcharge. This takes the powerful company tax charge to twenty-five. 17%.
The same old corporate tax price in Singapore is 17%. A partial tax exemption is eligible for the first SGD 300,000 of chargeable profits. under this condition, 75% of the first SGD 10,000 of chargeable earnings is tax exempt and 50% of the following SGD 290,000 of chargeable profits is tax exempt.
Learn more about corporate rate here:
https://brainly.com/question/25818989
#SPJ4
