Use the Table for the Question(s) Below

question 69

Multiple Choice

Use the table for the question(s) below.
Consider the following top federal tax rates in the United States:
Personal Tax Rates

-Assuming an average dividend payout ratio of 50%,the effective tax advantage for debt (τ*) was closest to:

• A) 0%
• B) 1%
• C) 5%
• D) 7%

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Definitions:

Parabola

A symmetric curve formed by the intersection of a cone with a plane parallel to a straight line, generatrix, of the cone.

Initial Velocity

The velocity of an object at the start of a time interval.

Coin

A piece of metal, usually flat and circular, authorized by a government for use as money.

Parabola

A U-shaped curve, represented mathematically as the graph of a quadratic function.