Multiple Choice
Assume that Larry's marginal tax rate is 24 percent. If corporate bonds pay 7.8 percent interest, what interest rate would a municipal bond have to offer for Larry to be indifferent between the two bonds?
A) 24.00 percent
B) 9) 27 percent
C) 7) 80 percent
D) 5) 93 percent
E) None of the choices are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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