Emily Is in the 35% Marginal Tax Bracket

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.

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 the above are correct.
E) None of the above are correct.