What is the after tax yield on a corporate bond

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Reference no: EM131209372

If a taxpayer's marginal tax rate is 33 percent, what is the after- tax yield on a corporate bond that pays 5 percent interest?

If the average marginal tax rate of all taxpayers is 50 percent, will the taxpayer with the 33 percent marginal tax rate prefer a corporate or a municipal security?

Assume equivalent safety and maturity.

Reference no: EM131209372

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