Jim Roberts is in the 35% personal tax bracket. He is considering investing in FPC bonds that have an interest rate of 9.3%.
2 .a. What is his after-tax yield (interest rate) on the bonds?
2 .b. Suppose Mercy Hospital (a not for profit) is offering bonds that have an interest rate of 6.5%. With all else the same, should Jim buy the FPC or Mercy bonds?