Annual coupon corporate bond and municipal bond

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Reference no: EM131543568

Bob Johnson is considering the purchase of one of the following bonds: a 5% annual coupon municipal bond or a 8% annual coupon corporate bond. Mr. Johnson is in the 33% tax bracket. If both bonds are selling at par, have similar maturities, and are equally risky, determine which bond he should purchase. (Show your work)

Reference no: EM131543568

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