Multiple Choice
Juanita's Steak House has $12,000 of debt outstanding that is selling at 101.2 percent of par and has a coupon rate of 8 percent and a current yield of 7.91 percent.The tax rate is 21 percent.What is the present value of the tax shield on debt?
A) $3,188
B) $3,887
C) $2,520
D) $2,500
E) $2,550
Correct Answer:
Verified
Correct Answer:
Verified
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