Dennis is currently considering investing in municipal bonds that earn 7.80 percent interest, or in taxable bonds issued by the Coca-Cola Company that pay 10.40 percent.

a. If Denniss tax rate is 22 percent, which bond should he choose?

• Municipal bonds

• Taxable bonds

b. Which bond should he choose if his tax rate is 32 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 strategy

• Business planning strategy

• Decision planning strategy

• Marketing planning strategy

• Conversion planning strategy

• Timing strategy

• Income shifting strategy