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

question 44

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

---

Definitions:

Ordinal

Ordinal relates to a categorical, statistical data type which reflects ordered entities in which the order matters but the differences between the entities do not have a mathematical meaning.

Friedman Test

A non-parametric statistical test used to compare three or more matched or paired groups across multiple test conditions or times, assessing differences in rankings.

Ordinal Data

A type of categorical data that has a meaningful order or ranking among the categories but not a measurable distance between them.

Significance Level

A threshold in hypothesis testing that determines the probability of rejecting the null hypothesis when it is actually true, typically denoted by alpha.