Curtis invests $200,000 in a city of Athens bond that pays 4 percent interest. Alternatively, Curtis...
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Curtis invests $200,000 in a city of Athens bond that pays 4 percent interest. Alternatively, Curtis could have invested the $200,000 in a bond recently issued by Initech, Incorporated that pays 5 percent interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24 percent. What is Curtis's after-tax rate of return on the city of Athens bond? Multiple Choice 2.32 percent 3.84 percent 4.00 percent 6.00 percent None of the choices are correct. Curtis invests $200,000 in a city of Athens bond that pays 4 percent interest. Alternatively, Curtis could have invested the $200,000 in a bond recently issued by Initech, Incorporated that pays 5 percent interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24 percent. What is Curtis's after-tax rate of return on the city of Athens bond? Multiple Choice 2.32 percent 3.84 percent 4.00 percent 6.00 percent None of the choices are correct.
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