PS An investors in the 28% tax bracket and lives in a state with no income tax He is trying to decide which of two bonds to purchase One is an) 10.49% corporate bond that is calling af par. The other is a municipal bond with a 743% coupon that is also selling at par fall other features of these two bonds are comparable, which should the investor elect? Why? Would your answer change this were an inte municipal bond and the Investor lived in place with high state income taxes? Explain Hall other features of these two bonds are comparable, which should the lovestor select? Why? Would your answer changes were an in state municipal bond and the investor lived in a place with high state income taxes? Explain which is the best selection? (Select the best choice below OA. The investor should select the corporate bond Since the fully axable equivalent yield of 7.13% is less than the 10.49% return on the corporate bond, the corporate issue offers a higher return and is the better buy. The decision very key would not change this were al municipal bond and the Investor lived in a state with high income taxes. Anna municipal bond would not shield the investor from federal taxes or from high state income taxes OB. The investor should select the municipal bond Since the fully axable equivalent yield of 10.32% sha10.49% return on the corporate bond the municipal sue is the botter buy. The decision very key would change this were an intermunicipal bond and the investor lived in a state with high income tax An In-stato municipal bond would not only shield the stor federales but also from high state income taxes O The Investor should select the corporate bond Since the full taxable equivalent yield of 10 32 is less than the 10 49% turn on the corporate bond, the corporate Issue offers a higher retum and is the better buy. The decision very likely would change if this ween-state municipal bond and the investor lived in a state with high income taxes municipal bond would not only shield the investor from federal areas but also from high state income taxes OD The Investor should select the municipal bond Since the laty taxable equivalent yeld of 7 43% is less than the 10495 retom on the corporate bond the municipal issue is the better buy The decision very lwy would change the were ante municipal bond and the investor lived in a state with high Income taxes. An in-state municipal bond would not only shed the stor from federal taxes but also from high state income nec