A client in the 34 percent marginal tax bracket is comparing a municipal bond that offers...
A client in the 34 percent marginal tax bracket is comparing a municipal bond that offers a 6.40 percent yield to maturity and a similar-risk corporate bond that offers a 7.40 percent yield. Determine the equivalent taxable yield. (Round your answer to 2 decimal places.)
Equivalent taxable yield _______ %
Homework Answers
| Answer: 9.70% | |
| Calculation: | |
| Equivalent taxable yield of the municipal bond = 6.40/(1-34%) = | 9.70% |
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A client in the 34 percent marginal tax bracket is comparing a
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