Question
Susie invests $250,000 in a city of Athens bond that pays 7% interest. Alternatively, Susie could have invested the $250,000 in a bond recently issued
Susie invests $250,000 in a city of Athens bond that pays 7% interest. Alternatively, Susie could have invested the $250,000 in a bond recently issued by Initech, Inc. that pays 9% interest with similar risk as the city of Athens bond. Assume that Susie's marginal tax rate is 32%. If Susie invested in the Initech Inc. bonds, what would be her after-tax rate of return? The year is 2020
- A. 6.12%
- B. 5.04%
- C. 2.52%
- D. 7.00%
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Principles Of Financial Accounting (Chapters 1-17)
Authors: John Wild
25th Edition
1260780147, 9781260780147
