25. Assume that Lavonia's marginal tax rate is 22 percent. If a city of Tampa bond pays 5.8 percent interest, what interest rate would a corporate bond have to offer for Lavonia to be indifferent between the two bonds?

A) 22.00 %

B) 5.80 %

C) 7.80 %

D) 4.70%

E) 7.44 %

26.If Julius has a 22 percent tax rate and a 11 percent after-tax rate of return, $59,500 of income in three years will cost him how much tax in today's dollars? Use Exhibit 3.1.

A)$ 9569

B)$43495

C)$ 13090

D)$ 59500

E) None of the choices are correct

EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of