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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 interest rate that is fully taxexempt. Bond C issued by a corproation pays interest at and is entirely taxable. Bond G issued by the US government, pays interest at 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
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