The after-tax return on a 9 percent tax-exempt municipal bond to a commercial bank in the 34 percent tax bracket is 5.94 percent.

Name: The after-tax return on a 9 percent tax-exempt municipal bond to a commercial bank in the 34 percent tax bracket is 5.94 percent.
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Quizplus · Accepted Answer

A tax-exempt bond means the interest is not subject to tax, so the after-tax return is the same as the stated interest rate, which is 9 percent, not 5.94 percent.

The After-Tax Return on a 9 Percent Tax-Exempt Municipal Bond