What is the bonds after-tax yield

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Reference no: EM13324190

Corporate bonds issued by Johnson Healthcare currently yield 8 percent.

a. If an investor is in the 34 percent tax bracket, what is the bond's after-tax yield?

b. Municipal bonds of equal risk currently yield 6 percent. At what tax rate would an investor be indifferent between these two bonds?

c. Which bond should an investor in the 34 percent tax bracket invest in?

Reference no: EM13324190

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