Solution-Find after tax return on the two bonds

Find after tax return on the two bonds

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Reference no: EM132622477

Suppose you had a choice between a corporate bond that had a coupon 6.4% and a municipal bond that had a coupon of 5%. You are in the 5% tax bracket. Given your tax bracket what would be your after tax return on each of the two bonds and which one would you choose as your investment.

Suppose your marginal tax rate was 15% - now what would be your after tax return on each of the two bonds and would your decision now be different?

Reference no: EM132622477

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Find after tax return on the two bonds

Reference no: EM132622477

Reference no: EM132622477

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