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    equivalent before-tax return from a nonmunicipal bond

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    1. If an investor is in a 34 percent marginal tax bracket and can purchase a municipal bond paying 7.25 percent, what would the equivalent before-tax return from a nonmunicipal bond have to be equate the two?

    2. If an investor is in a 30 percent marginal tax bracket and can purchase a straight (nonmunicipal bond) at 8.37 percent and a municipal bond at 6.12 percent, which should he or she choose?

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    Solution Preview

    1. If an investor is in a 34 percent marginal tax bracket and can purchase a municipal bond paying 7.25 percent, what would

    the equivalent before-tax return from a nonmunicipal bond have to be equate the ...

    Solution Summary

    Equivalent before-tax return from a non-municipal bond is analyzed in the solution.

    $2.19

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