16. Heather's interest and gains on investments for the current year are as follows: Interest on Madison County school bonds Interest on U.S. government bonds Interest on a Federal income tax refund Gain on the sale of Madison County school bonds Heather must report gross income in the amount of: a. $2,000. b. $1,800. c. $ 1,400. d. $ 1,300. e. None of these. 17. Emily is in the 35% marginal tax bracket. She can purchase a York County school bond yielding 3.5% interest, which is not subject to a 5 % state tax. But she is interested in earning a higher return for comparable risk. Which of the following is correct: a. If she buys a corporate bond that pays 6% interest, her after-tax rate of return will be less than if she had purchased the York County school bond. b. If she buys a U.S. government bond paying 5%, her after-tax rate of return will be less than if she had purchased the York County school bond. c. If she buys a common stock paying a 4 % dividend, after-tax rate of return will be higher than if she had purchased the York County school bond. d. All of these are correct. e. None of these is correct. 18. Stuart owns 300 shares of Turquoise Corporation stock and 2,000 shares of Blue Corporation stock. During the year, Stuart received 150 shares of Turquoise As a result of a 1-for-2 stock split. The value of the shares received was $ 4,800. Stuart also received 100 shares of Blue Corporation stock as a result of a 5 % stock dividend. Stuart did not have the option of receiving cash from Blue. The additional shares he received had a value of $ 7,200. Stuart's gross income from the receipt of the additional Turquoise and Blue shares is: a. $0. b. $ 4,800. c. $7,200. d. $ 12,000. e. None of these. $ 600 700 200 500