A 10-year Phillip-Chevon bond yields 8.5 percent. A 10-year City of Huntsville municipal bond of equal risk yields 6 percent. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? [Set your calculator to at least four decimal places]

A)2.5%

B)27.78%

C)28.00%

D)29.41%

E)39.52%