The tax-exempt status of municipal bonds implies that,for private firms

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The tax-exempt status of municipal bonds makes them more attractive to investors, leading to lower interest rates for these bonds compared to taxable bonds. For private firms, this means they face higher costs for capital because investors may prefer the tax-exempt municipal bonds unless the private firms offer a higher interest rate to compensate for the tax advantages.

The Tax-Exempt Status of Municipal Bonds Implies That,for Private Firms