37. Tax-exempts (S31.5) In 2006, agency bonds sold at a yield of 5.32%, while high-grade tax-exempts of
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37. Tax-exempts (S31.5) In 2006, agency bonds sold at a yield of 5.32%, while high-grade tax-exempts of comparable maturity offered 3.7% annually. If an investor receives the same after-tax return from corporates and tax-exempts, what is that investor’s marginal rate of tax?
What other factors might affect an investor’s choice between the two types of securities?
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Related Book For
Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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