Multiple Choice
Assume that Lavonia's marginal tax rate is 22 percent. If a city of Tampa bond pays 5 percent interest, what interest rate would a corporate bond have to offer for Lavonia to be indifferent between the two bonds?
A) 22 percent
B) 5 percent
C) 7 percent
D) 3) 9 percent
E) None of the choices are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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