Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mrs. Yue, a resident of Virginia, paid $50,000 for a bond issued by Pennsylvania that paid $3,400 interest this year. Her marginal state income
Mrs. Yue, a resident of Virginia, paid $50,000 for a bond issued by Pennsylvania that paid $3,400 interest this year. Her marginal state income tax rate is 6 percent. Under Virginia law, interest on debt obligations issued by another state is taxable. Mrs. Yue can deduct her state income tax on her Form 1040, and her marginal federal income tax rate is 24 percent. Required: Compute her after-tax rate of return on the bond. Note: Round your intermediate values to the nearest whole number. Enter your answer as a whole percentage rounded to two decimal places, (e.g. .0967 should be entered as 9.67). After-tax rate of return %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started