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Assume that John's marginal tax rate is 40%. If a city of Austin bond pays 5.70% interest, what interest rate would a corporate bond have

Assume that John's marginal tax rate is 40%. If a city of Austin bond pays 5.70% interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds?

Multiple Choice

28.50%
9.50%
5.70%
3.42%
None of the choices are correct.

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