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At What Point Would an Investor Be Indifferent Between a Compco

Question 127

Multiple Choice

At what point would an investor be indifferent between a Compco corporate bond yielding 8.5 percent and a tax-free municipal bond of equal financial strength if the investor's marginal tax rate is 25 percent?


A) 6.05 percent
B) 7.10 percent
C) 8.15 percent
D) 6.38 percent
E) 2.34 percent

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