When B&M compute the PV of the tax shield, why are they just dividing by i instead of (1+i)?  Unless they are assuming this goes on for perpetuity (they would make 1000 every year, no interest rate risk or anything), this doesn't make sense.

Also, I know that the dividends are not taxed twice, so that part makes sense.  But why are B&M combining the income to bondholders (=debt) and stockholders (=equity)?  I thought the financial manager's goal was to maximize the wealth of the STOCKholders, and thus the business grows.

Later on the page, where it talks about the present values: Why is the interest rate charged equal to the return on debt?  I've understood this course so far up to this point, but this chapter is really stumping me.