Lyme Home Has 3,000 Bonds Outstanding with a Face Value

question 61

Multiple Choice

Lyme Home has 3,000 bonds outstanding with a face value of $1,000 each and a coupon rate of 8%. The interest is paid semi-annually. What is the amount of the annual interest tax shield if the tax rate is 30%?

• A) $52,000
• B) $60,000
• C) $62,500
• D) $68,000
• E) $72,000

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Definitions:

Audience Shock

A reaction from the audience that occurs when they are presented with unexpected, surprising, or shocking information or content.

Direct Approach

A communication method where the main point or important information is presented at the beginning.

Communicating Bad News

The delicate process of delivering unfavorable or disappointing information in a way that minimizes negative impact.

Message Shortness

The practice of making communications brief and to the point, often to improve clarity or efficiency.