Farley is in the 32% marginal tax bracket. He is trying to decide between buying taxable or tax-exempt bonds. The taxable bonds are paying 6% and the tax-exempt bonds are paying 4.5%. Which should he purchase?

A. There is insufficient information to determine.

B. The tax-exempt bond

C. There is no difference in the after-tax rate of return.

D. The taxable bond

Answer rating: 100% (QA)

When the investor is in 32 marginal tax bracket then making an in... View the full answer