Short Term municipal bonds currently offer yields of 4%, while taxable bonds pay 5%

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Question

Short Term municipal bonds currently offer yields of 4%, while taxable bonds pay 5%

Short Term municipal bonds currently offer yields of 4%, while taxable bonds pay 5%. Which gives you the higher after tax yield if your tax bracket is.
a. zero
b. 10%
c. 20%
d. 30%

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Answer 1

Answer #1

a. taxable pays more after taxes (5%)
b. taxable pays more after taxes (4.5%)
c. they pay the same after taxes (4%)
d. municipal pays more after taxes in the 30% bracket

answered by: Josselin Peralta

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Answer 2

Answer #2

Thanks, I came up with the same answers except for c. I came up with 4% for the taxable and 5% for the municipal, can you show me the equation so I can see what I am doing wrong.

answered by: Paul

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Answer 3

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