You find the following information

• Face value of debt is $30 million
• Time to maturity is 5 years
• Interest expense is $3 million per year
• Coupon rate is 10%
• YTM is 9%
• Earnings are $17 million per year
• Marginal tax rate is 20%
• Average tax rate is 13%
• (some of this information may be redundant)

Find the approximate value of interest tax shield (tax savings), per year. Select the number that is closest.

Group of answer choices

500,000

600,000

100,000

1,000,000