What is the the taxable-equivalent yield on municipal bond

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Reference no: EM131619351

An investor in the 28% tax bracket is considering purchasing one of the following securities:

A taxable corporate bond offering a 6.0% yield to maturity

A tax-exempt municipal bond offering a 4.0% yield to maturity

What is the the taxable-equivalent yield on the municipal bond?

A 2.88%

B 4.32%

C 5.56%

D 6.48%

Reference no: EM131619351

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