Question
A bank is considering two securities: a 30-year Treasury bond yielding 5 percent and a 30-year municipal bond yielding 4 percent. a. If the banks
| A bank is considering two securities: a 30-year Treasury bond yielding 5 percent and a 30-year municipal bond yielding 4 percent. |
| a. | If the banks tax rate is 30 percent, calculate the Treasury bond's after-tax yield. (Round your answer to 1 decimal place. (e.g., 32.1)) |
| After-tax yield | % |
| b. | Which bond offers the higher after-tax yield? | ||||
|
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Financial Management for Public, Health and Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
5th edition
1506326846, 9781506326863, 1506326862, 978-1506326849
