Municipal bonds are not subject to taxes while corporate bonds are.
Return on Municipal bonds = Return on Corporate bonds(1-Tax rate)
i.e. Tax rate = (1-Municipal Rate/Corporate Rate)
= (1-5.8%/9.4%)
= 38.2979%
i.e. 38.30%
#11 UU700000, TaxTate 4070. VVnat is the tGA laDmty! 11) Municipal rate is 5.8% vs. corporate...
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