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An investor can invest in either a tax-exempt security that pays 4%, or a taxable corporate security of comparable risk and maturity that pays 5.1%.
An investor can invest in either a tax-exempt security that pays 4%, or a taxable corporate security of comparable risk and maturity that pays 5.1%. At what marginal tax rate will the investor be indifferent between these two securities?
25.15%
21.57%
23.43%
22.25%
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