Assume That Bill's Marginal Tax Rate Is 42 Percent

Multiple Choice

Assume that Bill's marginal tax rate is 42 percent. If corporate bonds pay 6 percent interest, what interest rate would a municipal bond have to offer for Bill to be indifferent between the two bonds? (Do not round your final answer.)

A) 42.00 percent
B) 8) 40 percent
C) 6) 00 percent
D) 5) 00 percent
E) 3) 48 percent