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LCMS Industries has$70 million in debt outstanding. The firm will pay only interest on this debt(the debt isperpetual). LCMS' marginal tax rate is35% and the

LCMS Industries has$70 million in debt outstanding. The firm will pay only interest on this debt(the debt isperpetual). LCMS' marginal tax rate is35% and the firm pays a rate of8% interest on its debt.

LCMS' annual interest tax shield is closestto:

$2.0 million

$5.6 million

$3.6 million

$2.8 million

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