Use the data in Table 15.3 to calculate the tax disadvantage of retained cash in the following:

a. 1998

b. 1976

Table 15.3

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TABLE 15.3 Year 1971-1978 1979-1981 1982-1986 1987 1988-1990 1991-1992 1993-1996 1997-2000 2001-2002 2003-2012 2013-2015 Top Federal Tax Rates in the United States, 1971-2015 Corporate Tax Rate 48% 46% 46% 40% 34% 34% 35% 35% 35% 35% 35% Interest Income 70% 70% 50% 39% 28% 31% 40% 40% 39% 35% 39.6% Personal Tax Rates* Average Rate on Equity Income 53% 49% 35% 33% 28% 30% 34% 30% 30% 15% 20% Dividends 70% 70% 50% 39% 28% 31% 40% 40% 39% 15% 20% Capital Gains 35% 28% 20% 28% 28% 28% 28% 20% 20% 15% 20%