An 8.5 percent coupon bond issued by the State of Ohio sells for $1,000.What coupon rate on a corporate bond selling at $1,000 par value would produce the same after tax return to the investor as the municipal bond if the investor is in the 25 percent marginal tax bracket?
A) 2.13%
B) 12.25%
C) 11.33%
D) 13.53%
E) 34.71%
Correct Answer:
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