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A municipal bond has a 4% coupon while a corporate bond of equal credit quality has a 6% coupon. Which would be better for an
- A municipal bond has a 4% coupon while a corporate bond of equal credit quality has a 6% coupon. Which would be better for an investor in the 24% tax bracket?
- The corporate because its coupon is higher than the munis taxable equivalent yield?
- The municipal because its taxable equivalent yield to 5.26%?
Can someone explain how they got the correct answer as well. Thank you.
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Behavioral Finance And Asset Prices
Authors: David Bourghelle, Pascal Grandin, Fredj Jawadi, Philippe Rozin
1st Edition
3031244850, 978-3031244858
