Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Business Mathematics with Canadian Applications

Authors: S. A. Hummelbrunner, Kelly Halliday, K. Suzanne Coombs

10th edition

133052311, 978-0133052312

More Books

Students also viewed these Finance questions