Calculate adjusted taxable equivalent yield

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Reference no: EM1363129

Your client's federal marginal tax rate is 36% and marginal state rate is 7%. The client doesn't itemize deductions on his federal tax return and is considering investing in a municipal bond issue in his state of residence that yields 5%. What is the adjusted taxable equivalent yield?
A. 3.2%
B. 4.65%
C. 5.38%
D. 8.4%

Municipal bonds issued in your state of residence aren't subject to federal or state tax.

Reference no: EM1363129

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