Question
Assume that John Richards pays income taxes at a 30 percent rate. He currently owns a not-for-profit (municipal) bond that pays 5 percent interest. What
Assume that John Richards pays income taxes at a 30 percent rate. He currently owns a not-for-profit (municipal) bond that pays 5 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 | 5.0 percent |
| B | 5.7 percent |
| C | 6.6 percent |
| D | 7.1 percent |
| E | 8.4 percent |
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Writing About Finance And Business
Authors: Alexandrea Geddes
First Canadian Edition
1927023866, 978-1927023860
