Question
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
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
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9.59%
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8.07%
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None of the choices are correct.
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11.75%
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9.75%
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Internal Audit Handbook Management With The SAP Audit Roadmap
Authors: Henning Kagermann, William Kinney, Karlheinz Küting, Claus-Peter Weber, Z. Keil, C. Boecker, J. Busch, O. Bussiek, M. H. Christ, P. Eckes, M. Falk, P. S. Greenberg, B. Reichert, M. Wolf
2008th Edition
3642430392, 978-3642430398
