By how much in usds does the interest tax shield increase


ECB borrows $1750000 USDs by issuing 4-year bonds. ECB's cost of debt is 5.5%, so it will need to pay $96250 USDs in interest each year for the next 4 years, and then repay the principal $1750000 USD in year 4. ECB's marginal tax rate will remain 35 throughout this period. By how much (in USDs) does the interest tax shield increase the value of ECB? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer.

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Financial Management: By how much in usds does the interest tax shield increase
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