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Tom is trying to compare the following two bonds trading at par: Bond A: 7% coupon rate, 20-year Treasury Note (taxable) Bond B: 4.5% coupon
Tom is trying to compare the following two bonds trading at par: Bond A: 7% coupon rate, 20-year Treasury Note (taxable) Bond B: 4.5% coupon rate, 20-year Texas Municipal Bond (tax exempt) Tom's marginal tax rate is 30%. Calculate the after-tax yield for the 20-year Treasury Note. (Enter percentages as decimals and round to 3 decimals)
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