Assume That John's Marginal Tax Rate Is 17 Percent

question 82

Multiple Choice

Assume that John's marginal tax rate is 17 percent. If a city of Austin bond pays 9 percent interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds?

• A)25.50 percent
• B)10.84 percent
• C)9)00 percent
• D)7)47 percent
• E)None of the choices are correct.