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Bond B , issued by the Town of Blacksburg, pays a 3 . 5 % interest rate that is fully tax - exempt. Bond C

Bond B, issued by the Town of Blacksburg, pays a 3.5% interest rate that is fully tax-exempt. Bond C , issued by a corproation , pays interest at 6% and is entirely taxable. Bond G, issued by the U.S. government, pays interest at 5% and is entirely taxable. Bond B and Bond G have identical risk. Bond C is more risky than the other bonds. On all other dimensions (eg, maturity) the three bonds are identical , and all three bonds trade at face value. What is the implicit tax rate on Bond B?25%30%41.67%42.86%

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