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loris [4]
2 years ago
11

What is the tax-exempt equivalent yield on a 9% bond yield given a marginal tax rate of 28%?

Business
1 answer:
grigory [225]2 years ago
5 0

The tax-exempt is 6.48 %

<h3>How to calculate the tax-exempt ?</h3>

The bond yield is 9%, let's divide 9% by 100

= 9/100

= 0.09

The marginal tax rate is 28%, let's divide 28% by 100

= 28/100

= 0.28

Therefore the tax-exempt can be calculated as follows

0.09(1-0.28) × 100

= 0.09(0.72) × 100

= 0.0648 × 100

= 6.48

Hence the tax-exempt is 6.48%

Read more on tax-exempt here

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