FIN MCQ
FIN 332
A 15 year annual coupon bond issued by the State of Georgia pays 8% coupons. If you are in the 28% tax bracket, what is the coupon rate that a corporate bond must pay you in order for you to be indifferent between the two bonds?
A 15 year annual coupon bond issued by the State of Georgia pays 8% coupons. If you are in the 28% tax bracket, what is the coupon rate that a corporate bond must pay you in order for you to be indifferent between the two bonds?
A 15 year annual coupon bond issued by the State of Georgia pays 8% coupons. If you are in the 28% tax bracket, what is the coupon rate that a corporate bond must pay you in order for you to be indifferent between the two bonds?
A) 5.76%
B) 9.2%
C) 11.11%
D) None of the above
Answer: C
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