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

---

Definitions:

Latching Relay

A relay that maintains a given position by mechanical or electrical means until released mechanically or electrically.

Retentive

Describes a feature in control systems that allows the retention of variable values or program states after a stop or power loss.

Magnetic Motor Starter

An electromechanical device that safely starts and stops a motor by controlling the electrical power supplied to the motor.

Full Load Current

The current drawn by an electrical machine, such as a motor or transformer, operating at its rated capacity under designated conditions.