Reggie White, a corporate treasurer
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Reggie
White, a corporate treasurer, is trying to decide which of two 1-year
securities to purchase: a negotiable CD with a nominal yield of 6 percent or a
municipal security with a nominal yield of 4.25 percent. The issuing
municipality is not in the same state as Reggie's company, but he recognizes
that the muni's interest is exempt from federal income taxation. His company's
marginal federal tax rate is 39 percent. Which security should the treasurer
select, assuming the securities have equal default risk?
Answer in Excel Document, and show
work/calculations on how you arrived at your answer
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