Multiple Choice
The June Bug has a $270,000 bond issue outstanding.These bonds have a 7.5 percent coupon,pay interest semiannually,and have a current market price equal to 98.6 percent of face value.The tax rate is 39 percent.What is the amount of the annual interest tax shield?
A) $3,948.75
B) $4,112.60
C) $5,311.22
D) $7,897.50
E) $8,225.20
Correct Answer:
Verified
Correct Answer:
Verified
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