An investor with a 50% marginal tax rate is trying to decide on a bond. Which of the following bonds offers the best tax-equivalent yield?
A) A corporate bond with an 8% yield to maturity.
B) A corporate bond with a 15% yield to maturity.
C) A municipal bond with a 5% yield to maturity.
D) A municipal bond with a 10% yield to maturity.
Correct Answer:
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