Mr.Fox has $100,000 to invest.He could buy corporate bonds with a 10% before-tax yield or tax-exempt bonds with an 8% before-tax yield.Which of the following statements is false?

Question

Quizplus · Accepted Answer

All statements are true. The implicit tax on tax-exempt bonds is the difference in yield compared to taxable bonds. At a 15% tax rate, the after-tax yield on corporate bonds is 8.5%, higher than tax-exempt bonds. At a 37% tax rate, the after-tax yield on corporate bonds is 6.3%, lower than tax-exempt bonds.

MrFox Has $100,000 to Invest