Assume That Jose Is Indifferent Between Investing in a Corporate

question 13

Multiple Choice

Assume that Jose is indifferent between investing in a corporate bond that pays 10% interest and a stock with no growth potential that pays an 8% dividend yield. Assume that the tax rate on dividends is 15%. What is Jose's marginal tax rate?

• A) 47%
• B) 37%
• C) 32%
• D) 15%
• E) None of these

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Definitions:

Hypothalamus

A region of the brain responsible for producing hormones that regulate body temperature, hunger, moods, release of hormones from many glands, especially the pituitary gland, and sleep cycles.

Evolutionary History

The branch of biology that studies the origins and changes in the diversity of life over time, explaining how and why species have evolved and become extinct.

Limbic System

A complex system of nerves and networks in the brain, involved in instinct and mood. It controls basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).

Brainstem

The part of the brain that connects the spinal cord to the rest of the brain, controlling many basic life functions such as breathing and heart rate.