Use the Information for the Question(s)below

question 75

Multiple Choice

Use the information for the question(s) below.
LCMS Industries has $70 million in debt outstanding.The firm will pay only interest on this debt (the debt is perpetual) .LCMS' corporate tax rate is 21% and the firm pays a rate of 8% interest on its debt.
-Assuming that the risk of the tax shield is only 6% even though the debt pays 8%,then the present value of LCMS' interest tax shield is closest to:

• A)$24.5 million.
• B)$18 million.
• C)$19.6 million.
• D)$20.0 million.

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Bank Customers

Individuals or entities that utilize the services provided by a bank, such as saving accounts, loans, and investment advice.

Credit Balances

Balances in financial accounts that represent amounts owed to others, typically indicating a surplus in accounts like liability and revenue accounts.

Bank's Records

Documentation and ledgers maintained by a bank, detailing all transactions and financial activities of the bank's accounts.

Adjusted Balance

The final amount on an account after all debits and credits have been accounted for, including interest and fees if applicable.