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Tonya, who lives in California, inherited a $100,000 State of California bond in 2017. Her marginal Federal tax rate is 35%, and her marginal tax
Tonya, who lives in California, inherited a $100,000 State of California bond in 2017. Her marginal Federal tax rate is 35%, and her marginal tax rate is 5%. The California bond pays 3.3% interest, which is not subject to California income tax/. She can purchase a corporate bond of comparable risk that will yield 5.2% or a U.S. government bond that pays a 4.6% interest. Which investment will provide the highest after-tax yield?
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