You have a marginal tax rate of 35% and an average tax rate of 29%. Municipal bonds in your area are yielding 4.20%. What is your equivalent taxable yield?

Name: You have a marginal tax rate of 35% and an average tax rate of 29%. Municipal bonds in your area are yielding 4.20%. What is your equivalent taxable yield?
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Question

Quizplus · Accepted Answer

The equivalent taxable yield is calculated using the formula: Tax-Exempt Yield / (1 - Marginal Tax Rate). So, 4.20% / (1 - 0.35) = 6.46%.

You Have a Marginal Tax Rate of 35% and an Average