Kelner's Nursery has 8,000 bonds outstanding with a face value of $1,000 each. The coupon rate is 6.5 percent and the tax rate is 34 percent. What is the present value of the interest tax shield?
A) $2.72 million
B) $2.83 million
C) $3.09 million
D) $3.13 million
E) $3.26 million

Question

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The Answer of Kelner's Nursery has 8,000 bonds outstanding with a face value of $1,000 each. The coupon rate is 6.5 percent and the tax rate is 34 percent. What is the present value of the interest tax shield?
A) $2.72 million
B) $2.83 million
C) $3.09 million
D) $3.13 million
E) $3.26 million

Kelner's Nursery Has 8,000 Bonds Outstanding with a Face Value