An investor is in the 28 percent income tax


An investor is in the 28 percent income tax bracket and can earn 3.3 percent on a non-taxable bond. What is the comparable yield on a taxable bond? If this same investor can earn 5.9 percent on a taxable bond, what must be the yield on a nontaxable bond so that the after- tax yields are equal?

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Finance Basics: An investor is in the 28 percent income tax
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Jerald Harris Sr.

12/8/2015 5:50:46 PM

An investor is in the 28 percent income tax bracket and can earn 3.3 percent on a non-taxable bond. What is the comparable yield on a taxable bond? If this same investor can earn 5.9 percent on a taxable bond, what must be the yield on a nontaxable bond so that the after- tax yields are equal?