You are currently deciding whether to purchase a 6-month corporate bond with a yield to maturity of 6.5% or to purchase a 6-month municipal bond with a yield to maturity of 5.0%. If your marginal tax rate is 24%, which bond should you invest in (all other things held equal)?

a. You should invest in the corporate bond because it has an after-tax yield of 6.5% which is higher than the after-tax yield on the municipal bond.

b. You should invest in the corporate bond because it has an after-tax yield to maturity of 4.94%, which is higher than the after-tax yield on the municipal bond.

c.You should invest in the municipal bond because it has an after-tax YTM of 4.25%, which is higher than the after-tax yield on the corporate bond.

d. You should invest in the municipal bond because it has an after-tax YTM of 4.0%, which is higher than the after-tax yield on the corporate bond.

e.You should invest in the municipal bond because it has an after-tax YTM of 5.0%, which is higher than the after-tax yield on the corporate bond.