Dylan,

You shouldn't use a riskless rate not because of risk of the tax shield but by
leveraging up the risk of the firm increases, i.e. default risk/bankruptcy 
risk.
A more appropriate rate should be the rate on the debt as determined by the
market.

**********************************************
Mark D. Guinney, CFA
Consultant
Watson Wyatt Investment Consulting
345 California Street, Ste. 1400
San Francisco, CA  94104
(415) 733-4487 ph.
(415) 733-4190 fax