Consider two bonds: a municipal bond with a 3 % interest rate, and a corporate bond with

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Question:

Consider two bonds: a municipal bond with a

3 %

interest rate, and a corporate bond with a

4.5 %

interest rate. Assume a

28 %

federal marginal income tax rate.

Based on the Tax Equivalent Yield

(

TEY

)

of the municipal bond, which bond provides the greater return?

Posted Date: May 19, 2024 02:06 AM

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Consider two bonds: a municipal bond with a 3 % interest rate, and a corporate bond with

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