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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

30-year Treasury bond

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Financial Management, Finance

Category:- Financial Management
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