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What is the interest rate needed on a $1,000 face value, 6% coupon corporate bond to make it equivalent in terms of return to one whose interest rate is tax free? Assume the corporate tax rate is 40%.?
Annual After tax return on corporate bond is value of the bond *tax rate *interest rate
R=0.4 or 40%
Paper#9256750 | Written in 27-Jul-2016Price : $16