Curtis invests $600,000 in a city of Athens bond that pays 8.25% interest. Alternatively, Curtis could have invested the $600,000 in a bond recently issued
Curtis invests $600,000 in a city of Athens bond that pays 8.25% interest. Alternatively, Curtis could have invested the $600,000 in a bond recently issued by Initech, Inc. that pays 11% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 28%. What is Curtis's after-tax rate of return on the city of Athens bond?
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Authors: Adolph Matz, Milton F. Usry
10th Edition
0538809256, 978-0538809252
