Suppose That Your Marginal Federal Income Tax Rate Is 30%,the

Multiple Choice

Suppose that your marginal federal income tax rate is 30%,the sum of your marginal state and local tax rates is 5%,and the yield on a thirty-year corporate bond is 10%.You would be indifferent between buying this corporate bond and buying a thirty-year municipal bond issued within your state (ignoring differences in liquidity,risk,and costs of information) if the municipal bond has a yield of

A) 6.5%.
B) 7.0%.
C) 9.5%.
D) 10.0%.