Southern Fried Foods Has a $12 Million Bond Issue Outstanding

Southern Fried Foods has a $12 million bond issue outstanding with a coupon rate of 6.75 percent and a yield-to-maturity of 7.27 percent. What is the present value of the tax shield if the tax rate is 35 percent?

A) $283,500
B) $305,340
C) $3,053,400
D) $3,560,000
E) $4,200,000