An Investment Is Available That Pays a Tax-Free 6

question 27

Multiple Choice

An investment is available that pays a tax-free 6%.The corporate tax rate is 30%.Ignoring risk, what is the pre-tax return on taxable bonds?

• A)4.20%
• B)6.00%
• C)7.67%
• D)8.57%
• E)None of the above.

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