For reference- I already worked through problem 1. my answer was 3.024%. here is the problem just to get an idea.

1. Champion Credit Union initiates a credit card product that yields 8.40%, with a funds cost of 3.00% (their profit spread is 5.40%). Legacy Savings Bank enters that market with an equivalent product yield. How low must they price their funding source to be equally able to retain earnings if the marginal tax rate is 20%, and a competitive dividend payout is 30%? Also.. if my answer is wrong please let me know. Thanks in advance!

2. If Highland Commercial Bank (HCB) enters that market with a marginal tax rate of 25%, and a dividend payout of 20%, and they can obtain funding at 3.00%, what will be their retained earnings spread if they have the same credit card price of 8.40%?

2(a). What credit price would HCB have to implement in order to match Champion's retained earnings spread?