The Ferson National Bank is thinking about purchasing a municipal bond that pays a coupon of 5.5%.This bank has a marginal tax rate of 30%.What is the after-tax yield on this bond?
A) 7.86%
B) 5.5%
C) 3.85%
D) 1.65%
E) None of the options is correct
Correct Answer:
Verified
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A)fully taxable
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