Stanley has $100,000 to invest. He is considering investing in either a T-Mobile Corporate High Yield bond
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Question:
Stanley has $100,000 to invest. He is considering investing in either a T-Mobile Corporate High Yield bond with a 7.875% before-tax yield or an Illinois Housing Authority tax-exempt bond with a 3.5% before-tax yield. Which of the following statements is FALSE?
Group of answer choices
If Stanley invests in the tax-exempt bond, he will pay $4,375 implicit tax every year.
None of these choices are false.
If Stanley's marginal tax rate is 35%, he should invest in the tax-exempt bond.
If Stanley's marginal tax rate is 35%, his explicit tax each year is $2,756.
Related Book For
Federal Taxation 2017 Individuals
ISBN: 9780134420868
30th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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