Asked by stacie Johnson on Jun 04, 2024
Verified
You earn 6% on your corporate bond portfolio this year, and you are in a 24% federal tax bracket and an 9% state tax bracket. Your after-tax return is ________. (Assume that federal taxes are not deductible against state taxes and vice versa) .
A) 4.5%
B) 4.14%
C) 4.02%
D) 3.12%
Federal Tax Bracket
Categories at different income levels in the U.S., where varying tax rates are applied.
State Tax Bracket
The division of income ranges that are used to determine the tax rate applicable to an individual's or entity's income within a particular state.
After-tax Return
The profit generated from an investment after all applicable taxes have been paid.
- Gain insight into the organization of the U.S. income tax system and its significance for personal financial strategy.
Verified Answer
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Learning Objectives
- Gain insight into the organization of the U.S. income tax system and its significance for personal financial strategy.