Curtis invests $775,000 in a city of Athens bond that pays 9.75% interest. Alternatively, Curtis could have invested the $775,000 in a bond recently issued by Initech, Inc. that pays 12% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24%.

What is Curtis's after-tax rate of return on the city of Athens bond?

Multiple Choice

• 9.59%

• 8.07%

• None of the choices are correct.

• 11.75%

• 9.75%