Use the Following Information to Answer the Question(s)below

question 12

Multiple Choice

Use the following information to answer the question(s) below.
Wyatt Oil issued $100 million in perpetual debt (at par) with an annual coupon of 7%.Wyatt will pay interest only on this debt.Wyatt's marginal tax rate is expected to be 40% for the foreseeable future.
-Wyatt's annual interest tax shield is closest to:

• A)$2.8 million
• B)$4.2 million
• C)$7.0 million
• D)$40 million

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Definitions:

Protein

Essential macromolecules made up of amino acids that play critical roles in the body, including as enzymes, hormones, and structural components of tissues.

Nutrient

Substances obtained from food that are necessary for the body's growth, repair, and maintenance.

Burn Unit

A specialized hospital unit dedicated to the treatment of patients with severe burn injuries.

Partial-Thickness Repair

A surgical procedure involving the repair of a wound or injury that does not extend through the full thickness of the skin or tissue.