Use the Table for the Question(s)below

question 3

Multiple Choice

Use the table for the question(s) below.
Consider the following historical top federal tax rates in the United States:
Personal Tax Rates
-In 2005,assuming an average dividend payout ratio of 50%,the effective tax advantage for debt (τ*) was closest to:

• A)24%.
• B)18%.
• C)35%.
• D)15%.