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What interest rate would a municipal bond have

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Question - Assume that Kevin's marginal tax rate is 25%. If corporate bonds pay 10% interest, what interest rate would a municipal bond have to offer for Kevin to be indifferent between the two bonds?

A) 25.00%.

B) 12.50%.

C) 10.00%.

D) 7.50%.

E) None of the choices are correct

Reference no: EM133039657

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