Kelner's Nursery Has 8000 Bonds Outstanding with a Face Value

question 4

Multiple Choice

Kelner's Nursery has 8000 bonds outstanding with a face value of $1000 each.The coupon rate is 6.5 per cent and the tax rate is 34 per cent.What is the present value of the interest tax shield?

• A)$3.26 million
• B)$2.72 million
• C)$3.09 million
• D)$3.13 million
• E)$2.83 million

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