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A municipal bond has a coupon rate of 5.08 percent and a YTM of 5.39 percent. If an investor has a marginal tax rate of

A municipal bond has a coupon rate of 5.08 percent and a YTM of 5.39 percent. If an investor has a marginal tax rate of 30 percent, what is the equivalent pretax yield on a taxable bond?

A) 3.77% B) 7.70% C) 7.26% D) 3.56% E) 5.63%

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