1. Potlach Corporation has $350 million of debt outstanding at an interest rate of 9 percent. What is the dollar value of the tax shield on that debt, just for this year, if Potlach is subject to a 35 percent marginal tax rate?
2. For a bond, if the coupon interest rate is 8% and the yield to maturity is 12% the bond is selling at?
3. A company has decided to substantially increase its dividends. Will this necessarily have a positive impact on its stock? Why or why not?