Your client's federal marginal tax rate is 36 percent, and the state marginal rate is 7 percent.
Question:
Your client's federal marginal tax rate is 36 percent, and the state marginal rate is 7 percent. The client does not itemize deductions on his federal return and is considering investing in a municipal bond issued in his state of residence that yields 5 percent. What is the adjusted taxable equivalent yield?
a. 3.2%
b. 4.65%.
c. 5.38%.
d. 7.81%.
e. 8.40%.
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