Use the Information for the Question(s)below

question 35

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.
-LCMS' annual interest tax shield is closest to:

• A)$2.8 million.
• B)$1.8 million.
• C)$3.6 million.
• D)$5.6 million.

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Definitions:

Misrepresentation

A false statement of fact made by one party to another, which induces the latter to enter into a contract.

Electronic Organ

An electronic keyboard instrument designed to mimic the sound and function of a traditional pipe organ.

Undue Influence

A situation where an individual is able to influence another person's decision-making process or consent through improper pressure or manipulation.

Non Est Factum

A legal defense asserting that a contract is invalid because the signing party was mistaken about its nature and character, not merely its contents or terms.