A taxable bond has a coupon rate of 5.95 percent and a YTM of 5.61 percent. If an investor has a marginal tax rate of 28 percent, what is the equivalent aftertax yield?
equivalent aftertax yield=YTM(1-tax rate)
=5.61*(1-0.28)
which is equal to
=4.0392%
A taxable bond has a coupon rate of 5.95 percent and a YTM of 5.61 percent....
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