What would a fully-taxable corporate bond have to yield

Reference no: EM13259977

Emily is comparing two bonds that she is thinking about purchasing. One is a municipal bond issued by her home state with a 5% yield that would be free from both federal and state taxation. Emily is in the 28% federal tax bracket and the 6% state tax bracket. What would a fully-taxable corporate bond have to yield in order to produce the same after-tax return as the 5% municipal bond? Show work. Express your answer as a percentage rounded to two decimal places.

Reference no: EM13259977

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