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An investor in the 28% tax bracket is considering purchasing one of the following securities:

A taxable corporate bond offering a 6.0% yield to maturity

A tax-exempt municipal bond offering a 4.0% yield to maturity

What is the the taxable-equivalent yield on the municipal bond?

A 2.88%

B 4.32%

C 5.56%

D 6.48%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92428061

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