Answered: For a taxpayer in the 25% marginal tax…

For a taxpayer in the 25% marginal tax bracket, a 20-year municipal bond currently yielding 5.5% would offer an equivalent taxable yield of A. 10.75%. B. 5.5%. C. 7.33%. D. 4.125%.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter4: Income Exclusions

Section: Chapter Questions

Problem 58P

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Question

For a taxpayer in the 25% marginal tax bracket, a 20-year municipal bond currently yielding 5.5% would offer an equivalent taxable yield of

A. 10.75%.

B. 5.5%.

C. 7.33%.

D. 4.125%.

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