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If You Are in the 28% Tax Bracket and You

Question 36

Multiple Choice

If you are in the 28% tax bracket and you consider a municipal bond yielding 5%. What is the equivalent before-tax interest rate that a taxable bond would have to yield to be equivalent to the municipal bond?


A) 5%
B) 6.51%
C) 7.46%
D) 6.94%

Correct Answer:

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