Solved: Which bond should the investor choose, Finance Basics

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Which bond should the investor choose

Problem:

The investor is considering purchasing one of two bonds: a corporate bond with a 9% coupon interest rate, selling at par, or a tax-free municipal bond with a 6% coupon interest rate, likewise selling at par. Given that the investor is in the 30% tax bracket, abd assuming that all other relevant factors are the same between the two bonds, which bond should the investor select?

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Finance Basics: Which bond should the investor choose

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Finance Basics: Which bond should the investor choose

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