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5.An investor is in the 32 percent income tax bracket and can earn 4.3 percent on a nontaxable bond. What is the comparable yield on
5.An investor is in the 32 percent income tax bracket and can earn 4.3 percent on a nontaxable bond. What is the comparable yield on a taxable bond? If this same investor can earn 7.2 percent on a taxable bond, what must be the yield on a nontaxable bond so that the after-tax yields are equal?
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