Use the Following Information to Answer the Question(s) Below

question 73

Multiple Choice

Use the following information to answer the question(s) below.
d'Anconia Copper has $200 million in cash that it can use for a share repurchase. Suppose instead that d'Anconia Copper invests the funds in an account paying 5% interest for one year. Assume that the corporate tax rate is 35%, the individual capital gains rate is 15% and the individual rate on ordinary income is 30%.
-Which of the following formulas is INCORRECT?

• A) τ*_retain =
• B) P_retain =
• C) P_retain = P_cum ×
• D) P_retain = P_cum × (1 - τ*_retain)

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