Apple Inc. is currently an unlevered firm (100% equity) with the cost of equity (RU) 20%. The value of the firm (VU) = $500. The company would like to change its capital structure to 100% debt by issuing debt of $500 at RD= 7% and using the money to buy back the shares. The tax rate (TC) is 21%. What is the interest tax shield (tax saving from interest payment) each year?

Group of answer choices $500 $35 $7.35 $105