Tax bracket is trying to decide which of the two bonds

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Reference no: EM131020649

An investor in the 28 percent tax bracket is trying to decide which of the two bonds to purchase. One is corporate bond carrying an 8 percent coupon and selling at par. The other is a municipal bond with a 5 ½ percent coupon and it, too, sells at par. Assuming all other relevant factors are equal, which bond should the investor select.

Reference no: EM131020649

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