Emily Is in the 35% Marginal Tax Bracket

question 71

Multiple Choice

Emily is in the 35% marginal tax bracket.She can purchase a York County school bond yielding 3.5% interest and the interest is not subject to a 5% state tax.But she is interested in earning a higher return
For comparable risk.Which of the following is correct:

• A)If she buys a corporate bond that pays 6% interest, her after-tax rate of return will be less than if she purchased the York County school bond.
• B)If she buys a U.S.government bond paying 5%, her after-tax rate of return will be less than if she purchased the York County school bond.
• C)If she buys a common stock paying a 4% dividend, her after-tax rate of return will be higher
• Than if she purchased the York County school bond.
• D)All of these are correct.
• E)None of these are correct.

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Definitions:

Prospective Payment System

A healthcare payment system where the amount or rate of reimbursement is predetermined before the service is delivered.

Medicare

A federal health insurance program in the United States primarily for people aged 65 and older, as well as for some younger individuals with disabilities.

Healthcare Costs

The expenses related to the provision of health care services, including the costs of medical procedures, drugs, equipment, and hospital stays.

Aging Population

Demographic trend characterized by an increase in the proportion of elderly individuals within the population.