Ernie's Has 4,200 Bonds Outstanding with a Face Value of $1,000

question 14

Multiple Choice

Ernie's has 4,200 bonds outstanding with a face value of $1,000 each,a market value of $1,060 each,and a coupon rate of 7.6 percent.What is the amount of the annual interest tax shield if the tax rate is 35 percent?

• A)$118,423
• B)$99,714
• C)$100,780
• D)$111,720
• E)$102,250

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