Which bond should the investor select

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Reference no: EM13266857

An investor in the 28 percent tax bracket is trying to decide which of two bonds to purchase.

One is a corporate bond carrying an 8 percent coupon and selling at par. The other is a municipal bond with a 5½ percent coupon, and it, too, sells at par. Assuming all other relevant factors are equal, which bond should the investor select?

Reference no: EM13266857

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