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%