Wesley Jenkins is looking for a fixed-income investment. He is considering 2 bond issues: a. A Treasury

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Wesley Jenkins is looking for a fixed-income investment. He is considering 2 bond issues:

a. A Treasury with a yield of 5%

b. An in-state municipal bond with a yield of 4%

Wesley is in the 33% federal tax bracket and the 8% state tax bracket. Which bond would provide Wesley with a higher tax-adjusted yield?

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Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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Question Posted: Apr 28, 2015 03:45 AM

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Wesley Jenkins is looking for a fixed-income investment. He is considering 2 bond issues: a. A Treasury

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Treasury taxable equivalent yield Treasury yield1 State tax rate 0051 008 005092 00543 543 ...View the full answer

Fundamentals of Investing

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