Problem 7-31 Comparing Bond Yields (LG7-6)

A client in the 33 percent marginal tax bracket is comparing a municipal bond that offers a 5.80 percent yield to maturity and a similar-risk corporate bond that offers a 7.10 percent yield. Determine the equivalent taxable yield. (Round your answer to 2 decimal places.)

Which bond will give the client more profit after taxes?

multiple choice corporate

bond municipal bond