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After-tax rate of return on the taxable bond

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Reference no: EM133113075

You can invest in taxable bonds that are paying a yield of 8.2 percent or a municipal bond paying a yield of 6.75 percent. Assume your marginal tax rate is 21 percent.

a. Calculate the after-tax rate of return on the taxable bond?

b. Which security bond should you buy?

Reference no: EM133113075

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