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ololo11 [35]
3 years ago
11

A municipal bond has yield to maturity of 4.89 percent. a comparable corporate bond has yield to maturity of 6.70 percent. at wh

at marginal tax rate will an investor be indifferent between these two bonds?
Business
1 answer:
pishuonlain [190]3 years ago
4 0
<span>If the corporate bond yields 6.7% and is taxed at 27% there is no effective difference in yield; it would bring the yield down to 4.89%. There would be no difference between a tax free municipal bond or a taxable corporate bond in this scenario.</span>
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