# Calculate the after-tax return of 6.89 percent, 20 year

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Question description

Calculate the after-tax return of 6.89 percent, 20 year, A- rated corporate bond for an investor in the 10% marginal tax bracket. Compare this yield to a 4.87 percent, 20 year, A-rated tax- exempt municipal bond and explain which alternative is better .Repeat the calculations and comparison for investor in the 33 percent marginal tax bracket.

He after-tax return of a 6.89 percent, 20 year, A-rated corporate bond for an investor in the 10% marginal tax bracket is _____ ( round to the two decimal places)

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