Suppose that, holding yield constant, investors are indifferent as to whether they hold bonds issued by the federal government or bonds issued by state and local governments $($that

is$,$ they consider the bonds the same with respect to default risk, information costs, and liquidity$).$ Suppose that state governments have issued perpetuities $($or consoles$)$ with $$78$

coupons and that the federal government has also issued perpetuities with $$78$ coupons. If the state and federal perpetuities both have after$-$tax yields of $9\%,$ what are their pre$-$tax

yields? $($Assume that the relevant federal income tax rate is $38\mathrm{.}57\%.)$

The pre$-$tax yield on the state perpetuity will be

$\%.($Round your response to two decimal places.$)$