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Suppose a foreign investor who holds tax - exempt Eurobonds paying 8 . 0 % is considering investing in an equivalent - risk domestic bond

Suppose a foreign investor who holds tax-exempt Eurobonds paying 8.0% is considering investing in an equivalent-risk domestic bond in a country with a 17.0% withholding tax on interest paid to foreigners. If 8.0% after-tax is the investor's required return, what before-tax rate would the domestic bond need to pay to provide the required after-tax return?

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