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A tax free municipal bond provides a yield of 3.2%. What is the equivalent taxable yield on the bond given a 35% tax bracket

Respuesta :

Tundexi

Answer:

4.92%

Explanation:

Equivalent taxable yield on the bond = Rate / (1-Tax rate)

= 3.2% / 1 - 0.35

= 0.032 / 0.65

= 0.049230

= 4.9230%

= 4.92%

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