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Finance 2. Calculate the after-tax return of a 13.54 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket. Compare

Finance

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2. Calculate the after-tax return of a 13.54 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket. Compare this yield to a 9.03 percent, 20-year, A-rated, tax-exempt municipal bond and explain which alternative is better. Repeat the calculations and comparison for an investor in the 35 percent marginal tax bracket. The after-tax return of a 13.54 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket is %. (Round to two decimal places.) Compare this yield to a 9.03 percent, 20-year, A-rated, tax-exempt municipal bond and explain which alternative is better. (Select the best answer below.) O A. The 9.03 percent tax free municipal bond is a better alternative than the after tax yield of 12.19 percent for the corporate bond at the 10 percent tax rate. OB. The after tax yield of 12.19 percent for the corporate bond is a better alternative than the 9.03 percent tax free municipal bond at the 10 percent tax rate. The after-tax return of a 13.54 percent, 20-year, A-rated corporate bond for an investor in the 35 percent marginal tax bracket is %. (Round to two decimal places.) Repeat the calculations and comparison for an investor in the 35 percent marginal tax bracket. (Select the best answer below.) O A. The after tax yield of 8.80 percent for the corporate bond is a better alternative than the 9.03 percent tax free municipal bond at the 35 percent tax rate. OB. The 9.03 percent tax free municipal bond is a better alternative than the after tax yield of 8.80 percent for the corporate bond at the 35 percent tax rate

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