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A firm purchases $10 million of corporate bonds that paid a 16 percent interest rate, or $1.6 million in interest. If the firm's marginal tax

A firm purchases $10 million of corporate bonds that paid a 16 percent interest rate, or $1.6 million in interest. If the firm's marginal tax rate is 40 percent, what is the after-tax interest yield?

  • A. 9.60%
  • B. 8.74%
  • C. 7.40%
  • D. 12.90%
  • E. 13.20%

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