<span>Tax shield is the saving in tax due to exemption of tax on interest expense = interest expense * tax rate
= $35 million * 36% = $ 12.6 million</span>
Answer: Option C
Explanation: As per the subject matter of behavioral economics, endowment effect refers top the phenomenon under which it is assumed that a rational individual will retain a commodity he or she already owns rather than acquiring the same commodity if he do not own it.
Hence from the above we can conclude that correct option is C as it states that one will not sell a painting even though at a price that the holder would pay to purchase it himself.
The strategy that they use is <span>signaling value by targeting sophisticated buyers
This type of strategy could only work if the target market has specific preferences.
Even though the number of potential consumers for this market tend to be considerably small compared to another market, but the customers that obtained through this strategy tend to show higher level of loyalty.</span>
