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A municipal bond carries a coupon of 5% and is trading at par. What is the tax rate applicable to this investor, if the equivalent

A municipal bond carries a coupon of 5% and is trading at par. What is the tax rate applicable to this investor, if the equivalent taxable yield (such as that of a corporate bond) is 8.57%?

30%

42% <---- This is the correct answer, but what is the work?

34%

53%

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