In this ques, they have assumed a tax rate of 30%, although no such information is given. Marginal tax rate of 30% is given in the exhibit that relates to a different ques.
In the errata they’ve mentioned option c is the correct answer. Without tax rate the ans is B.
How can a tax rate of 30% be assumed in solving this ques?
in this question, as nothing else is mentioned therefore we will take the tax rate given in the item set somewhere but yes, they should have mentioned it seprately. In the exam, this won’t happen don’t worry.