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An Investment Is Available That Pays a Tax-Free 5

Question 10

Multiple Choice

An investment is available that pays a tax-free 5%.Ignoring risk,what is the pre-tax return on taxable bonds? The corporate tax rate is 30%.

A) 4.20%
B) 6.00%
C) 7.14%
D) 8.57%
E) None of the above.

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