Suppose a municipal bond pays 8 percent and a corporate bond of the same maturity and degree

Question:

Suppose a municipal bond pays 8 percent and a corporate bond of the same maturity and degree of risk pays 12 percent.

a. What tax bracket do you have to be in to be just willing to buy the

municipal bond?

b. Who would buy municipal bonds in a regressive tax system: the

rich or the poor?

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Economics Barrons Business Review Series

ISBN: 9781438008776

6th Edition

Authors: Walter J. Wessels

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Question Posted: Feb 18, 2024 04:01 AM

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Suppose a municipal bond pays 8 percent and a corporate bond of the same maturity and degree

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a The breakeven tax bracket is the one with the tax ra...View the full answer

Economics Barrons Business Review Series

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