Question

A client in the 33 percent marginal tax bracket is comparing a municipal bond that offers a 5 percent yield to maturity and a similar-risk corporate bond that offers a 6.25 percent yield. Which bond will give the client more profit after taxes

Answer 1

The municipal bond

Step-by-step explanation:

5%/1-.33 = 7.46

1.7.46>6.25, so the client should take the municipal bond