What is the effective tax rate for an investor who owns a property which has a...
What is the effective tax rate for an investor who owns a property which has a before-tax yield of 12.30% and an after-tax yield of 10.12%? (Rounded to nearest whole %)
1 35%
2 18%
3 25%
4. 15%
Homework Answers
Before tax yield*(1-tax rate)=Aftertax yield
12.3*(1-tax rate)=10.12
1-tax rate=(10.12/12.3)
tax rate=1-(10.12/12.3)
=18%(Approx).
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