Assume that DR B pays income taxes at a 40 percent rate. He currently owns a not-for-profit (municipal) bond that pays 7 percent interest. What interest rate would have to be set on a for-profit (corporate) bond to produce the same amount of usable (after-tax) income?

a. 15.0 percent

b. 11.7 percent

c. 16.6 percent

d. 7.0 percent

e. 8.4 percent