Given the Following Information, Calculate the Appropriate After-Tax Discount Rate

question 27

Multiple Choice

Given the following information, calculate the appropriate after-tax discount rate. Tax rate on comparable risk investment: 35%, Investor's before-tax opportunity cost: 12%, Capitalization rate: 8%.

• A) 2.8%
• B) 4.2%
• C) 5.2%
• D) 7.8%

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Definitions:

Selective Reduction

A medical procedure used in fertility treatments to reduce the number of fetuses in a multiple pregnancy, aiming to increase the chance of a successful, healthy pregnancy.

Genetic Abortion

Termination of a pregnancy based on the genetic characteristics of the fetus, often after the detection of genetic anomalies.

Genetic Materials

Biological substances that carry an organism’s genetic information, such as DNA and RNA.