Question
Assume that Lavonia's marginal tax rate is 20%. If a city of Tampa bond pays 3.6% interest, what interest rate would a corporate bond have
Assume that Lavonia's marginal tax rate is 20%. If a city of Tampa bond pays 3.6% interest, what interest rate would a corporate bond have to offer for Lavonia to be indifferent between the two bonds?
Multiple Choice
- 20.00%
- 6.60%
- 5.60%
- 2.60%
- None of the choices are correct.
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Advanced Cost Accounting
Authors: J.K. Mitra
1st Edition
8122425941, 978-8122425949
