What interest rate does surething inc need

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Reference no: EM13944280

Question:

Hugh has the choice between investing in a City of Heflin bond at 5.55 percent or a Surething bond at 8.85 percent. Assuming that both bonds have the same nontax characteristics and that Hugh has a 40 percent marginal tax rate.

What interest rate does Surething Inc., need to offer to make Hugh indifferent between investing in the two bonds? (Round your answer to 2 decimal places.)

Reference no: EM13944280

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