A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified ?

Question

Accepted Answer

A. 12.07 %

Answer

B. 12.34 %

Answer

C. 12.67 %

Answer

D. 12.87 %

A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified ?

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