Suppose you are in the 35% federal income tax bracket and 10% state income tax bracket. You purchase 5-year maturity bonds issued by the State of New York and the bond coupon income is exempt from state and federal income taxes. If the municipal bond yield is 5%, what is taxable bond equivalent yield? If 5-year maturity corporate bonds with similar credit quality provide 8% yield, which bonds do you prefer between the municipal bonds and corporate bonds? Why?