Assume That Five Years Have Passed Since Wyatt Issued This

question 84

Multiple Choice

Assume that five years have passed since Wyatt issued this debt.While tax rates have remained at 40%,interest rates have dropped so that Wyatt's current cost of debt capital is now only 4%.Wyatt's annual interest tax shield is now closest to:

• A)$2.8 million
• B)$4.2 million
• C)$40.0 million
• D)$60.0 million