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A firm has a bond issue outstanding with a par value of $450,000. The bonds have a coupon rate of 6 percent, pay interest semiannually,

A firm has a bond issue outstanding with a par value of $450,000. The bonds have a coupon rate of 6 percent, pay interest semiannually, and have a market price equal to 102 percent of par value. The firms tax rate is 21 percent. What is the amount of the annual tax shield on the debt?

Multiple Choice

A. $5,783

B. $5,670

C. $21,330

D. $27,000

E. $94,500

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