Calculate the treasury bonds after-tax yield

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Reference no: EM131506435

A bank is considering two securities: a 30-year Treasury bond yielding 10 percent and a 30-year municipal bond yielding 6 percent.

a. If the bank’s tax rate is 20 percent, calculate the Treasury bond's after-tax yield. (Round your answer to 1 decimal place. (e.g., 32.1))

After-tax yield %

b. Which bond offers the higher after-tax yield?

30-year Treasury bond

30-year municipal bond

Reference no: EM131506435

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