You are going to finance your next project by issuing debt that requires six annual interest payments of

$22

million each year. You are subject to a

35%

tax rate and your cost of debt is

5%.

What is the value of the interest rate tax shield?

A.

$78.2

million

B.

$46.9

million

C.

$31.3

million

D.

$39.1

million