Suppose Congress was to reduce the top corporate tax rate, tc, to 30% from 35%. How would this affect the required pretax corporate return, R*c, calculated in the final line of Table 4.4? That is, recalculate the required pretax corporate return for the holding periods and other parameter values as listed for the 2003 line in Table 4.4.
Table 4.4

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Required Rt, for n-year holding periocd Period Pre-1981 10.0 1982-1986 10.0 46 .0 1987 1988-1990 10.0 34 28 1991-1992 10.0 34 31 10 20 50 cg 46 70 7.72 7.55 7.37 7.09 6.56 20 11.57 11.32 .06 10.67 10.06 28 14.12 13.56 13.02 . 11.28 28 15.15 14.46 13.82 13.00 11.95 28 14.52 13.88 3.2 2.5 11.49 .28 10.0 40 39 1993-1996 10.0 35 .396 28 12.91 12.40 1.9 .24 10.32 1997-2000 10.0 35 396 20 11.62 11.31 11.02 10.60 9.99 2001-2002 10.0 35 386 2003-2012 10.0 35 35 2013b 18 11.52 11.25 10.99 0.6 10.06 15 11.76 1153 130 10.98 0.51 10.0 35 396 20 11.62 1 .02 10.60 9.99