17. Cookeville City Council is trying to issue a municipal bond that is tax-free. A current taxable bond that has similar risk characteristics is traded at $1100. The taxable bond has 10-year maturity with a semi-annual coupon payment at 6% annual coupon rate. If the tax rate is 40%, what is the annual coupon rate that the Cookeville City Council should provide on its municipal bond to equate its price to that of the taxable bond? a. 2.5% b. 3.0% c. 3.5% d. 4.0% e. 4.5%