Question: Problem 7 (1 point) ABC Bank is thinking about purchasing a corporate bond that has a yield of 7.45%. This bank has a marginal tax

Problem 7 (1 point)

ABC Bank is thinking about purchasing a corporate bond that has a yield of 7.45%. This bank has a marginal tax rate of 35%. What is the after-tax yield on this bond?

After-tax Yield = 7.45% * (1-.35) = 4.84%

Problem 8 (1 point)

ABC Bank is thinking about purchasing a municipal bond that has a yield of 7.45%. This bank has a marginal tax rate of 35%. What is the after-tax yield on this bond?

After-tax Yield = 7.45% * (1-.35) = 4.84%

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