Suppose you had the opportunity to buy either a municipal bond or a corporate bond, both of which have a face value and purchase price
Suppose you had the opportunity to buy either a municipal bond or a corporate bond, both of which have a face value and purchase price of $1,000. The municipal bond has coupon payments of $60 and a coupon rate of 6%. The corporate bond has coupon payments of $80 and an interest rate of 8%. Which bond would you choose to purchase, assuming a 40% tax rate?
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Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
