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

Question

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] · Answer 1 · 2022-06-05T04:50:25+03:00

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%