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Curtis invests $300,000 in a city of Athens bond that pays 5 percent interest. Alternatively, Curtis could have invested the $300,000 in a bond recently

Curtis invests $300,000 in a city of Athens bond that pays 5 percent interest. Alternatively, Curtis could have invested the $300,000 in a bond recently issued by Initech, Inc. that pays 7 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?

4.84 percent

5.00 percent

None of the choices are correct

3.32 percent

7.00 percent

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