A municipal bond holder buys a 5% coupon annual payment muni bond at a price of $4,900. The bond has a $5,000 face value. In one year she sells the bond for $4,975. The appropriate capital gains tax rate is 15% and her ordinary income tax rate is 28%. What is her after-tax rate of return?

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The Answer of A municipal bond holder buys a 5% coupon annual payment muni bond at a price of $4,900. The bond has a $5,000 face value. In one year she sells the bond for $4,975. The appropriate capital gains tax rate is 15% and her ordinary income tax rate is 28%. What is her after-tax rate of return?

A Municipal Bond Holder Buys a 5% Coupon Annual Payment