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Dennis is currently considering investing in municipal bonds that earn 7.50 percent interest, or in taxable bonds issued by the Coca- Cola Company that pay
Dennis is currently considering investing in municipal bonds that earn 7.50 percent interest, or in taxable bonds issued by the Coca- Cola Company that pay 10.00 percent a. If Dennis's tax rate is 22 percent, which bond should he choose? O Municipal bonds Taxable bonds b. Which bond should he choose if his tax rate is 32 percent? O 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? O Development planning strategy O Business planning strategy O Decision planning strategy O Marketing planning strategy O Conversion planning strategy Timing strategy O Income shifting strategy
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