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Assume that John's marginal tax rate is 20%. If a city of Austin bond pays 10.20% interest, what interest rate would a corporate bond have

Assume that John's marginal tax rate is 20%. If a city of Austin bond pays 10.20% interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds?

Multiple Choice

25.50%

12.75%

10.20%

8.16%

None of the choices are correct.

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