What's the taxable equivalent yield on a municipal bond with a yield to maturity of 5.25...
What's the taxable equivalent yield on a municipal bond with a yield to maturity of 5.25 percent for an investor in the 25 percent marginal tax bracket? (Round your answer to 2 decimal places.)
Multiple Choice
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1.31%
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21.00 %
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5.25%
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7.00%
Homework Answers
taxable equivalent yield=municipal bond yield/(1-tax rate)
=5.25/(1-0.25)
which is equal to
=7%
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