Question

An 8.4 percent coupon bond issued by the state of Indiana sells for $1,000. What coupon rate on a corporate bond selling at its $1,000 par value would produce the same after-tax return to the investor as the municipal bond if the investor is in?
a. The 15 percent marginal tax bracket?
b. The 25 percent marginal tax bracket?
c. The 35 percent marginal tax bracket?



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  • CreatedDecember 17, 2014
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