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Assume That Bill's Marginal Tax Rate Is 32 Percent

Question 83

Multiple Choice

Assume that Bill's marginal tax rate is 32 percent. If corporate bonds pay 8 percent interest, what interest rate would a municipal bond have to offer for Bill to be indifferent between the two bonds?


A) 32.00 percent
B) 10.40 percent
C) 8) 00 percent
D) 7) 00 percent
E) None of the choices are correct.

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