Georga's Restaurants Has 7,000 Bonds Outstanding with a Face Value

Multiple Choice

Georga's Restaurants has 7,000 bonds outstanding with a face value of $1,000 each, a market price of $982, and a coupon rate of 6.95 percent. The interest is paid semiannually. What is the amount of the annual interest tax shield if the tax rate is 23 percent?

A) $111,895
B) $113,323
C) $107,750
D) $110,420
E) $113,006