A municipal bond has a coupon rate of 5.20 percent and a YTM of 5.47 percent....
A municipal bond has a coupon rate of 5.20 percent and a YTM of 5.47 percent. If an investor has a marginal tax rate of 30 percent, what is the equivalent pretax yield on a taxable bond?
Homework Answers
| Municipal bond rate = Taxed bond rate * (1-Tax rate) |
| 5.47 = Taxed bond rate * (1-0.3) |
| Taxed bond rate = 7.81 |
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A municipal bond has a coupon rate of 5.20 percent and a YTM of
5.47 percent....
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A municipal bond has a coupon rate of 5.86 percent and a YTM of 5.55 percent. If an investor has a marginal tax rate of 30 percent, what is the equivalent pretax yield on a taxable bond? Select one: 06.02% O 3.89% O 8.37% O 7.93% 4.10%
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