PMF, Inc., can deduct interest expenses next year up to 30% of EBIT. This limit is equally likely to be $12 million, $21 million, or $30 million. Its corporate tax rate

is 38%, and investors pay a 30% tax rate on income from equity and a 35% tax rate on interest income. a. What is the effective tax advantage of debt if PMF has interest expenses of $10 million this coming year? b. What is the effective tax advantage of debt for interest expenses in excess of $30 million? (Ignore carryforwards). c. What is the expected effective tax advantage of debt for interest expenses between $12 million and $21 million? (Ignore carryforwards). d. What level of interest expense provides PMF with the greatest tax benefit? a. What is the effective tax advantage of debt if PMF has interest expenses of $10 million this coming year? If PMF has interest expenses of $10 million this coming year, the effective tax advantage is %. (Round to one decimal place.)