This paper circulates around the core theme of MBA 507 – Intel Corp. uses almost no debt and had a total market capitalization together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Intel Corp. uses almost no debt and had a total market capitalization of about $40 billion in March 2007. Assume that Intel faces a 40% tax rate on corporate earnings. Ignore all elements of the decision except the corporate tax savings.By how much could Intel managers increase the value of the firm by issuing $20 billion in bonds (which would be rolled over in perpetuity) and simultaneously repurchasing $20 billion in stock?$ billionSuppose the personal tax rate on equity income, as faced by Intel shareholders, is 10% and that the personal tax rate on interest income is 40%. Recalculate the gains to Intel from replacing $20 billion of equity with debt. Round your answer to two decimal places.$ billion
