Granny's Home Remedy has a $27 million bond issue outstanding with a coupon rate of 8.75 percent and a current yield of 8.13 percent.What is the present value of the tax shield if the tax rate is 35 percent?
A) $768,285
B) $826,875
C) $839,002
D) $8,160,000
E) $9,450,000
Correct Answer:
Verified
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