An 85% Coupon Bond Issued by the Provincial Government of Nova

An 8.5% coupon bond issued by the provincial government of Nova Scotia 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 tax-free municipal bond if the investor is in the 25% marginal tax bracket?

A) 2.13%
B) 12.25%
C) 11.33%
D) 13.53%
E) 34.71%