DLTuckers Has $21,000 of Debt Outstanding That Is Selling at Par

question 41

Multiple Choice

D.L.Tuckers has $21,000 of debt outstanding that is selling at par and has a coupon rate of 7.5 percent.The tax rate is 32 percent.What is the present value of the tax shield?

• A)$504
• B)$615
• C)$644
• D)$6,200
• E)$6,720

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Definitions:

Square Inches

Square inches are units of area measurement equal to the area of a square with sides one inch in length.

Base

The number that is repeatedly multiplied by itself when raised to an exponent, or the bottom side of a geometric figure.

Simplify

The process of altering an expression or equation to make it easier to understand or solve, usually by combining like terms or removing parentheses.

Average Cost

The total cost divided by the number of goods produced, calculating the cost per unit of goods.