Dennis is currently considering investing in municipal bonds that earn 4.80 percent interest, or in taxable bonds issued by the Coca-Cola Company that pay 6.4 percent.

a.If Dennis's tax rate is 20 percent, which bond should he choose?

Municipal bonds

Taxable bonds

b.Which bond should he choose if his tax rate is 30 percent?

Municipal bonds

Taxable bonds

c.At what tax rate would he be indifferent between the bonds?

Tax rate : %

d.What strategy is this decision based upon?

Development planning strateg

Business planning strateg

Decision planning strategy

Marketing planning strategy

Conversion planning strategy

Timing strategy

Income shifting strategy