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If an Investor Is in the 33% Marginal Tax Bracket

Question 48

Short Answer

If an investor is in the 33% marginal tax bracket and can purchase a municipal bond paying 7.5%, what would the equivalent before-tax return from a corporate bond have to be to equate the two returns on a before-tax basis?

Correct Answer:

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11.19%
Explanation: Refer to E...

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