George, a wealthy investor, is uncertain whether he should invest in taxable or tax-exempt bonds. What tax and nontax factors should he consider?

A. The main tax factor is the increase in the tax bracket that will result from the tax exempt bond.

B. There are no significant tax factors to consider.

C. The main tax factor is whether the difference in interest rates is offset by the amount of tax that must be paid on the taxable interest income. Thus, George should look at the after-tax cash flow from each investment as the principal tax factor to consider.

D. The main tax factor is the difference in the marginal tax bracket that will result from each bond.

Other nontax factors George should consider include the following (Select all that apply.)

A. term of the two alternative investments

B. liquidity

C. the quantity of bonds

D. other quality factors influencing risk

E. marketability

F. Georges filing status