Assume That Juanita Is Indifferent Between Investing in a Corporate

question 81

Multiple Choice

Assume that Juanita is indifferent between investing in a corporate bond that pays 10.2% interest and a stock with no growth potential that pays a 6% dividend yield. Assume that the tax rate on dividends is 15%. What is Juanita's marginal tax rate?

• A) 50%
• B) 40%
• C) 30%
• D) 15%
• E) None of these

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