What is their tax equivalent yield

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Reference no: EM131868473

1. The City of Tempe has a municipal bond outstanding with an interest rate of 3.6%. For an investor in the 35% tax bracket, what is their tax equivalent yield?

a 4.8%

b 5.5%

c 5.1%

d 5.3%

2. What would you be willing to pay for a $1000 par, 7 1/2% coupon bond with 20 years until maturity if you wanted to earn a return of 7%?

a $951

b $1035

c $966

d $1053

Reference no: EM131868473

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