If you compare the yield of a municipal bond with that of a Treasury - 1475

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If you compare the yield of a municipal bond with that of a Treasury bond, what is the equivalent before-tax yield of a municipal bond yielding 6% per year for an investor in the 36% tax bracket (round to nearest .1%)?

          a.   9.4%

          b.   8.1%

          c.   7.7%

          d.   6.3%

Solution Description

If you compare the yield of a municipal bond with that of a Treasury bond, what is the equivalent before-tax yield of a mun