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The TT company is planning to raise $2,500,000 in perpetual debt at 11% to finance part of the expansion.

The TT company is planning to raise $2,500,000 in perpetual debt at 11% to finance part of the expansion. They have just recieved an offer from the albanic county board of commissioners to raise the financing for them at 8% if they build in albanic county. What is the total added value of debt financing to TT if their tax rate is 34% and Albanic raises it for them?

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CH220310_5297_FIN.doc

The TT Company is planning to raise $2,500,000 in perpetual debt at 11% to finance
part of the expansion. They have just received an offer from the Albanic county board
of commissioners to raise...

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