Dennis is currently considering investing in municipal bonds that earn 9.30 percent interest, or in taxable bonds issued by the Coca-Cola Company that pay 12.40 percent.

Please answer a,b,c, and d

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

multiple choice 1

• Municipal bonds
• Taxable bonds

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

multiple choice 2

• Municipal bonds
• Taxable bonds

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

d. What strategy is this decision based upon?

multiple choice 3

• Development planning strategy
• Business planning strategy
• Decision planning strategy
• Marketing planning strategy
• Conversion planning strategy
• Timing strategy
• Income shifting strategy