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What interest rate would you need to earn on corporate bond

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Question - You're thinking about purchasing a bond and have two options. The first is a 10-year municipal bond that yields 5.20% or a 10-year corporate bond of equal risk that would provide you with the same after-tax return. If your marginal tax rate (including state and federal taxes) is 28.00%, what interest rate would you need to earn on the corporate bond to equate to the municipal bond return?

Reference no: EM133188932

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