the maxwell company is financed entirely with equity. the company is considering

Question

the maxwell company is financed entirely with equity. the company is considering a loan of $1.8 million. the loan will be repaid in equal intallments over the next two years, and it has an interest rate of 8 percent. the company's tax rate is 35 percent. according to MM proposition I with taxes, what would be the increase in the value of the company after the loan?

***************Please do not copy and paste the answer from another site. I do not understand this question and need a real answer. I have googled it before and wasnt able to understand what and how to get the correct answer.

Explanation / Answer

my view a reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, charitable donations, amortization and depreciation. These deductions reduce taxpayers' taxable income for a given year or defer income taxes into future years

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