Emily is in the 35% marginal tax bracket. she can purchase a york county school bond yielding 3.5%
interest and the interest is not subject to a 5% state tax. but she is interested in earning a higher return
for comparable risk. which of the following is correct:
a. if she buys a corporate bond that pays 6% interest, her after-tax rate of return will be less than if
she purchased the york county school bond.
b. if she buys a u. s. government bond paying 5%, her after-tax rate of return will be less than if
she purchased the york county school bond.
c. if she buys a common stock paying a 4% dividend, her after-tax rate of return will be higher
than if she purchased the york county school bond.
d. all of these are correct.
e. none of these are correct.