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scoundrel [369]
3 years ago
7

You can invest in taxable bonds that are paying a yield of 9.4 percent or a municipal bond paying a yield of 7.65 percent. Assum

e your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond?
Business
1 answer:
yarga [219]3 years ago
8 0

Answer:

Answer for the question :

You can invest in taxable bonds that are paying a yield of 9.4 percent or a municipal bond paying a yield of 7.65 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond?

is explained below.

Explanation:

the after-tax rate of return on the taxable bond = 9.4%*(1-0.21)

the after-tax rate of return on the taxable bond = 7.426%

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