Consider the following top federal tax rates in the United States:

Personal Tax Rates

Year	Corporate Tax Rate	Interest Income	Dividends	Capital Gains
2013	15%	29%	19.3%	14.5%

Assuming an average dividend payout ratio of 50%, the effective tax advantage for debt (*) was closest to:

A) 0%

B) 1%

C) 5%

D) 7%

Answer:

Explanation: