Question
4) Municipal Bond A ten-year treasury bond has a Yield-To-Maturity (YTM) of 2%. You are a high income earner who pays: 38% federal income taxes
4) Municipal Bond
A ten-year treasury bond has a Yield-To-Maturity (YTM) of 2%. You are a high income earner who pays: 38% federal income taxes and 10% state income taxes. If a municipal bond gave you income that was:
- Free of only federal taxes, what is the lowest YTM that you would be willing to accept before buying the bond?
- Free of both federal and state taxes, what is the lowest YTM that you would be willing to accept before buying the bond?
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: Clyde P. Stickney, Paul Brown, James M. Wahlen
6th Edition
0324302959, 9780324302950
