Salinas Corporation has net income of $ 15 million per year on net sales of $ 90 million per year . It currently has no long - term debt but is considering a debt issue of $ 20 million . The interest rate on the debt would be 7 % . Salinas Corp. currently faces an effective tax rate of 40 % . What would be the annual interest tax shield to Salinas Corp. if it goes through with the debt issuance ?