Suppose an Investor Is Considering a Corporate Bond with a 7.17

Multiple Choice

Suppose an investor is considering a corporate bond with a 7.17% before-tax yield and a municipal bond with a 5.93% before-tax yield.At what marginal tax rate would the investor be indifferent between investing in the corporate and investing in the municipal?

A) 15.4%
B) 23.7%
C) 39.5%
D) 17.3%
E) 12.4%