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You can invest in taxable bonds that are paying a yield of 9.5 percent or a municipal bond paying a yield of 7.75 percent. Assume your marginal tax rate is 28 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16)) Rate of return % b. Which security bond should you buy? Taxable bonds that are paying a 9.5 percent annual rate of return. Municipal bond paying a 7.75 percent annual rate of return.

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Financial Management, Finance

Category:- Financial Management
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