Lifelong Savings Bank is considering investing in municipal bonds issued by the city of Richmond. The munis, which mature in 15 years, provide an annual rate of return of 10.25%. Lifelong Savings Bank's cost of funds is 5.5% and it is in the top corporate tax bracket of 35%. Calculate the effective tax rate (tb) Lifelong will pay assuming: o The bonds are non-qualified oThe bonds are qualified (assume 80% of carrying costs are deductible ) What rate would a taxable bond have to pay to earn an equivalent after-tax return in each case above (Re)? That is, what is each muni's tax equivalent yield? If similar risk taxable investments paid 14% (before- tax), would you invest in it or in the qualified muni? If similar risk taxable investments paid 14% (before- tax), would you invest in it or in the non-qualified muni? Lifelong Savings Bank is considering investing in municipal bonds issued by the city of Richmond. The munis, which mature in 15 years, provide an annual rate of return of 10.25%. Lifelong Savings Bank's cost of funds is 5.5% and it is in the top corporate tax bracket of 35%. Calculate the effective tax rate (tb) Lifelong will pay assuming: o The bonds are non-qualified oThe bonds are qualified (assume 80% of carrying costs are deductible ) What rate would a taxable bond have to pay to earn an equivalent after-tax return in each case above (Re)? That is, what is each muni's tax equivalent yield? If similar risk taxable investments paid 14% (before- tax), would you invest in it or in the qualified muni? If similar risk taxable investments paid 14% (before- tax), would you invest in it or in the non-qualified muni