An investor, Terry Noirs, is in the 25% tax bracket and has been contemplating investing in corporate bonds.
After a recent stay at the Eiffel Payne Hospital, a not-for-profit hospital, he learned that they will be issuing tax-exempt bonds for a major expansion.
The tax-free bonds pay 6% interest. What is the minimum rate the taxable corporate bonds of the same risk must pay for Terry to invest in them?