A company just issued a 5 year bond for a price of $100 that pays coupons every 6 months. The coupon rate is 3percent per annum, the yield is 3 percent per annum and the principal is $100. The bond buyer was also a company. Both the buying and selling companies are subject to a 30% corporate tax rate.

Which of the following statements is NOT correct? All things remaining equal, per one bond, every 6 months:

Select one:

a. The coupon paid will be $1.50.

b. The tax-deductible interest expense for the issuing company will be $1.50.

c. The extra interest tax shields generated for the issuing company due to the bond will be $1.50.

d. At the instant that the coupon is paid the bond price will fall by the amount of the coupon.

e. Just after the coupon is paid, the price is expected to be the same as the price 6 months earlier just after that previous coupon was paid.