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A taxpayer is considering buying a fully taxable corporate bond (5 year maturity), yielding 6% annual returns (compounded and payable annually) and a face value
A taxpayer is considering buying a fully taxable corporate bond (5 year maturity), yielding 6% annual returns (compounded and payable annually) and a face value of $1,000. The taxpayer requires a 6% AFTER-TAX yield and faces a 21% tax rate. What interest RATE (pre-tax) is required to earn 6% after tax? Please enter your response in percent with one decimal and no "%" sign (1.1% = 1.1). Note that this is the Yield to Maturity of the bond.
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