Multiple Choice
Assume that John's marginal tax rate is 40%. If a city of Austin bond pays 6% interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds?
A) 6.00%.
B) 10.00%.
C) 3.60%.
D) 30.00%.
E) None of the choices are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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