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Question
A 9 percent coupon bond issued by the State of Pennsylvania sells for $1,000 and thus provides a 9 percent yield to maturity. What yield on a Synthetic Chemical Company bond would cause the two bonds to provide the same after-tax rate of return to an investor in the 28 percent tax bracket?
a. 12.50%
b. 17.50%
c. 7.00%
d. 14.00%
e. 9.00%
Answer
This answer is hidden. It contains 94 characters.
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