Daniel Plans to Invest $20,000 in Either a Corporate Bond

Daniel plans to invest $20,000 in either a corporate bond paying 5% or a tax-exempt bond with a 4% interest rate.The bonds have an equivalent level of risk.Daniel has a 33% marginal tax rate and wants to maximize his after-tax earnings.Daniel should

A) invest in the corporate bond due to its higher stated interest rate.
B) invest in the tax-exempt bond since its yield is more than the after-tax return on the corporate bond.
C) invest in the corporate bond because its after-tax earnings are more than the return on the tax-exempt bond.
D) allocate his money equally between the two investments.