Suppose a Project Financed Via an Issue of Debt Requires

Multiple Choice

Suppose a project financed via an issue of debt requires six annual interest payments of $20 million each year.If the tax rate is 30% and the cost of debt is 8%,what is the value of the interest rate tax shield?

A) $31.35 million
B) $27.74 million
C) $23.20 million
D) $32.64 million
E) $36 million