Multiple Choice
Assume that Bill's marginal tax rate is 30%. If corporate bonds pay 8% interest, what interest rate would a municipal bond have to offer for Bill to be indifferent between the two bonds?
A) 30.00%.
B) 10.40%.
C) 8.00%.
D) 7.00%.
E) None of the choices are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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