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Please answer the questions below , I have added the text book pages for the assignments that will need to be completed . Thanks so much in advance !!!
Complete the following textbook questions:
Chapter 21: Questions 21-1 and 21-2 on page 868
Chapter 21: Minicase on page 871 (complete parts A through E)
Business School Assignment Instructions
The requirements below must be met for your paper to be accepted and graded:
Write between 750 – 1,250 words (approximately 3 – 5 pages) using Microsoft Word in APA style, see example below.
Use font size 12 and 1” margins.
Include cover page and reference page.
At least 80% of your paper must be original content/writing.
No more than 20% of your content/information may come from references.
Use at least three references from outside the course material; one reference must be from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the three reference requirement.
Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style.
References must come from sources such as scholarly journals found in EBSCOhost or on Google Scholar, government websites and publications, reputable news media (e.g. CNN , The Wall Street Journal, The New York Times) websites and publications, etc. Sources such as Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for academic writing.
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Chapter 21: Question 21-1
Define each of the following terms:
a) Interest tax shields; value of tax shield
Interest tax shields are the reduction on income taxes due to the deductions from the interest
payments.
Value of the tax shield is determines from the product of the amount of the taxable expense and
the tax rates as below;
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑇𝑎𝑥 𝑆ℎ𝑖𝑒𝑙𝑑 = 𝑇𝑎𝑥𝑎𝑏𝑙𝑒 𝑒𝑥𝑝𝑒𝑒𝑛𝑠𝑒 ∗ 𝑇𝑎𝑥 𝑟𝑎𝑡𝑒𝑠
b) Adjust present value (APV) model
The adjusted present value (APV) model presumes the starting conditions in which the value of
the business is considered to be without any debts at the beginning.
As the debts are added, the net effect on the value is evaluated by considering both the forecasted
benefits and the cost of borrowing (Mishkin, n.d.)
This is done by presuming the primary b...