A bank is considering two securities: a 30-year Treasury bond yielding 6 percent and a 30-year municipal bond yielding 5 percent. a. If the bank’s tax rate is 25 percent, calculate the Treasury bond's after-tax yield. (Round your answer to 1 decimal place. (e.g., 32.1))
a. If the bank’s tax rate is 25 percent, calculate the Treasury bond's after-tax yield. (Round your answer to 1 decimal place. (e.g., 32.1))
After- tax yield _______%
b. Which bond offers the higher after-tax yield?
30-year municipal bond
or
30-year Treasury bond