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Luke Heckman has asked you to analyze the following investment alternatives for the highest after-tax rate of return under the assumption that the

Luke Heckman has asked you to analyze the following investment alternatives for the highest after-tax rate of return under the assumption that the client is subject to a 28 percent marginal federal income tax and a 5 percent state income tax. • A corporate bond with a 7 percent pretax return • An out-of-state municipal bond with a 5.75 percent pretax return • An in-state municipal bond with a 5.5 percent pretax return

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