If you compare the yield of a municipal bond with that of a treasury bond, - 3444

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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 25% tax bracket?

a. 4.0%

b. 7.5%

c. 8.0%

d. 9.5%

Solution Description

If you compare the yield of a municipal bond with that of