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Ernie's Has 3,500 Bonds Outstanding with a Face Value of $1,000

Question 60

Multiple Choice

Ernie's has 3,500 bonds outstanding with a face value of $1,000 each and a coupon rate of 8.5 percent.What is the amount of the annual interest tax shield if the tax rate is 34 percent?


A) $98,500
B) $99,100
C) $100,750
D) $101,150
E) $102,250

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