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    Financial System and the Economy Principles
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    Exam 6: The Structure of Interest Rates
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    Assume a Corporate Marginal Tax Rate of 38
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Assume a Corporate Marginal Tax Rate of 38

Question 68

Question 68

Multiple Choice

Assume a corporate marginal tax rate of 38%. What yield on a municipal bond would leave a corporation indifferent between a 9% corporate bond and a municipal bond?


A) 4.8%
B) 5.58%
C) 6.03%
D) 7.2%

Correct Answer:

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