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) 30%
B) 10%
C) 6%
D) 3.6%
E) None of these
Correct Answer:
Verified
Correct Answer:
Verified
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