Assume That John's Marginal Tax Rate Is 37 Percent

question 22

Multiple Choice

Assume that John's marginal tax rate is 37 percent. If a city of Austin bond pays 6 percent interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds?

• A)37.00 percent
• B)9)52 percent
• C)6)00 percent
• D)3)78 percent
• E)None of the choices are correct.

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