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:

Alzheimer's Disease

Alzheimer's Disease is a progressive neurological disorder characterized by memory loss, cognitive decline, and personality changes, leading to severe dementia.

DNA

Deoxyribonucleic acid, the molecule that contains the genetic instructions used in the growth, development, functioning, and reproduction of all known living organisms and many viruses.

Biomarker

Biological molecules found in blood, other body fluids, or tissues that are a sign of a normal or abnormal process, or of a condition or disease.

Alzheimer's Disease

A progressive neurological disorder that causes the brain to shrink and brain cells to die, resulting in severe memory loss and cognitive decline.