What is the taxable equivalent yield on municipal bond

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Consider the following three bond quotes: a Treasury bond quoted at 105:27, a corporate bond quoted at 96.40, and a municipal bond quoted at 100.80. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

What’s the taxable equivalent yield on a municipal bond with a yield to maturity of 3.4 percent for an investor in the 28 percent marginal tax bracket? (Round your answer to 2 decimal places.)

A client in the 29 percent marginal tax bracket is comparing a municipal bond that offers a 6.2 percent yield to maturity and a similar-risk corporate bond that offers a 9.00 percent yield.

Reference no: EM131869457

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