Describe why may the corporate bond be preferred

Reference no: EM13328386

An investor in the 35 percent tax bracket may purchase a corporate bond that is rated double A and is traded on the New York Stock Exchange (the bond division). This bond yields 9.0 percent. The investor may also buy a double-A-rated municipal bond with a 5.85 percent yield. Why may the corporate bond be preferred? (Assume that the terms of the bonds are the same.)

Reference no: EM13328386

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