Question
A 5-year corporate bond yields 7.0%. A 5-year municipal bond (tax exempt bond) of equal risk yields 5.0%. Assume that the state tax rate is
A 5-year corporate bond yields 7.0%. A 5-year municipal bond (tax exempt bond) of equal risk yields 5.0%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds?
A. 27.78%
B. 33.76%
C. 32.16%
D. 30.63%
28.57%
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Fundamentals Of Healthcare Finance
Authors: Paula H. Song, Kristin L. Reiter
4th Edition
1640553223, 978-1640553224
