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Melinda invests $410,000 in a City of Heflin bond that pays 6.4 percent interest. Alternatively, Melinda could have invested the $410,000 in a bond recently
Melinda invests $410,000 in a City of Heflin bond that pays 6.4 percent interest. Alternatively, Melinda could have invested the $410,000 in a bond recently issued by Surething Inc., that pays 8 percent interest and has risk and other nontax characteristics similar to the City of Heflin bond. Assume Melindas marginal tax rate is 20 percent. (Leave no cells blank - be sure to enter "0" wherever required. Round your after-tax rate of return to one decimal place.) Required: What is her after-tax rate of return for the City of Heflin bond?
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