Assume That Jose Is Indifferent Between Investing in a Corporate

question 13

Multiple Choice

Assume that Jose is indifferent between investing in a corporate bond that pays 10% interest and a stock with no growth potential that pays an 8% dividend yield. Assume that the tax rate on dividends is 15%. What is Jose's marginal tax rate?

• A) 47%
• B) 37%
• C) 32%
• D) 15%
• E) None of these

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Definitions:

Register

A small, high-speed storage location within a computer or other digital processor used to hold temporary data or instructions.

Output

the result or product of a process, system, or activity, such as data from a computer program or electricity from a generator.

Location

The specific place or position where something is situated or where an event occurs.

Thumbwheel Switch

A mechanical component used to input data or values into a system by turning a small wheel that has numbers or characters on its edge.