On March 28, 2008, 5-year AAA munis were offering 3.04%/4.14% 73.43% of the 5-year corporate AAA
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On March 28, 2008, 5-year AAA munis were offering 3.04%/4.14% ≈ 73.43% of the 5-year corporate AAA yields. Therefore, (1 − τ) ≈ 0.7343, which means that the marginal investor’s tax rate was τ ≈ 26.57%.
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