Mr. Gordon, a resident of Pennsylvania, paid $20,000 for a bond issued by Delaware. This year, he received $800 of interest on the bond. His marginal state tax rate is 7%, and under Pennsylvania law, interest on debt obligations issued by another state is taxable. Mr. Gordon can deduct state income tax on his federal return, and his marginal federal tax rate is 35%. Compute his after-tax rate of return on the bond.
A. 3.825%
B. 3.725%
C. 4%
D. 2.420%
Answer: A
You might also like to view...
Sales Discounts is an example of a(n) ____________________ account
Fill in the blank(s) with correct word
An example of a disability covered by the Americans with Disabilities Act is a serious heart attack
a. True b. False Indicate whether the statement is true or false
Two general sets of factors moderate the power and discretion of executives. These include:
a. employees and other managers. b. environmental factors and stakeholders. c. external factors and organizational factors. d. leadership factors and market issues.
________ occurs when an organization contracts with an external provider to produce one or more of the organization's products or services.
A) Inpatriation B) Outsourcing C) Offshoring D) Expatriation E) Franchising