Consider the following equation: Pretain = Pcum × The term τi in this equation represents:
A)the corporation's tax rate on interest income.
B)the investor's tax rate on capital gains.
C)the investor's tax rate on interest income.
D)the investor's tax rate on cumulative dividends.

Question

Consider the following equation: Pretain = Pcum ×  The term τi in this equation represents:
A)the corporation's tax rate on interest income. 
B)the investor's tax rate on capital gains. 
C)the investor's tax rate on interest income. 
D)the investor's tax rate on cumulative dividends.

Quizplus · Accepted Answer

The term τi in the equation represents the investor's tax rate on interest income, as it is a commonly used symbol for tax rate and the equation is specifically referring to the retention of interest income after taxes.

Consider the Following Equation: Pretain = Pcum × the Term