Assuming That the Risk of the Tax Shield Is Only

question 59

Multiple Choice

Assuming that the risk of the tax shield is only 6% even though the debt pays 8%,then the present value of LCMS' interest tax shield is closest to:

• A)$24.5 million
• B)$18 million
• C)$33.0 million
• D)$20.0 million

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Definitions:

Subsurface Mining

A method of extracting minerals and ores from beneath the earth's surface, involving tunnels or shafts, as opposed to open-pit or surface mining.

Room-And-Pillar

A method of mining that involves excavating rooms while leaving columns or pillars of material to support the mine roof.

Subsurface Mining

The extraction of minerals and ores from underground, involving tunnels or shafts to access geological resources deep below the earth's surface.

Surface Mining

A method of extracting mineral and energy resources near the surface of the Earth rather than through underground tunnels.