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True or False. A firm in the 40 percent tax bracket is aware of a tax-exempt security that is paying a yield of 6.5 percent.
True or False. A firm in the 40 percent tax bracket is aware of a tax-exempt security that is paying a yield of 6.5 percent. To match this yield, taxable securities must offer a before-tax yield of 11.77 percent. Provide at least five sentences of Explanation or calculation to support your answer.
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