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An Investment Is Available That Pays a Tax-Free 6

Question 47

Multiple Choice

An investment is available that pays a tax-free 6%. The corporate tax rate is 30%. Ignoring risk,what is the pre-tax return on taxable bonds?

A) 4.20%
B) 6.00%
C) 7.67%
D) 8.57%
E) None of these.

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