Debt issued by Southeastern Corporation currently yields 12%. A municipal bond of equal risk currently yields 8%.

Question:

Debt issued by Southeastern currently yields 12%. A municipal bond of equal risk currently yields 8%. At what marginal tax rate would an investor be indifferent between these two bonds?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...