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Andrew Tutor
Course
ACC432A
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Subject
Accounting
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Question

Assume that Jose is indifferent between investing in a corporate bond that pays 10% interest and a stock with no growth potential that pays an 10.2% dividend yield. Assume that the tax rate on dividends is 15%. What is Jose's marginal tax rate? (Do not round intermediate computations.)

Multiple Choice

28.52%
18.74%
13.30%
5.64%

None of the choices are correct.

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