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A municipal bond has yield to maturity of 4.27 percent while a comparable corporate bond has yield to maturity of 5.33 percent. Which of these
A municipal bond has yield to maturity of 4.27 percent while a comparable corporate bond has yield to maturity of 5.33 percent. Which of these two bonds will an investor with a marginal tax rate of 25 percent choose to invest in? The corporate bond because it offers the investor a higher nominal yield to maturity than the municipal bond. The municipal because its yield to maturity is higher than the nominal yield to maturity of the corporate bond. The municipal because it offers the investor a higher after-tax yield to maturity than the corporate bond. The corporate bond because it offers the investor a higher after-tax yield to maturity than the municipal bond. 5 pts A municipal bond has yield to maturity of 4.83 percent. An investor with a marginal tax rate of 35 percent is indifferent between this municipal bond and an otherwise identical taxable corporate bond. What is the yield to maturity of the corporate bond? 6.52 percent 5.91 percent O 7.95 percent O 7.43 percent
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