Suppose you are a wealthy individual paying 39.1 percent tax on income. What is the expected after-tax yield on each of the following investments?

a. A municipal note yielding 6.5 percent pretax.

b. A Treasury bill yielding 10 percent pretax.

c. A floating-rate preferred stock yielding 7.5 percent pretax.

How would your answer change if the investor is a corporation paying tax at 35 percent? What other factors would you need to take into account when deciding where to invest the corporation’s spare cash?