Suppose investors face a tax rate of 40 % on interest received from corporate bonds. Suppose AAA-rated

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Suppose investors face a tax rate of 40 % on interest received from corporate bonds. Suppose AAA-rated corporate bonds currently offer yields of about 7 %. Approximately what yield would AAA-rated municipal bonds need to offer to be competitive?

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Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart

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Question Posted: Mar 26, 2015 06:23 AM

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Suppose investors face a tax rate of 40 % on interest received from corporate bonds. Suppose AAA-rated

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Introduction to Corporate Finance What Companies Do

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