An individual in the 15% tax bracket purchases a 6% corporate bond. Her after-tax yield is

Name: An individual in the 15% tax bracket purchases a 6% corporate bond. Her after-tax yield is
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Question

Quizplus · Accepted Answer

The after-tax yield can be calculated as (1 - tax rate) * before-tax yield. So, in this case, the after-tax yield would be (1 - 0.15) * 6%. Simplifying this, we get (0.85) * 6% = 5.1%. Therefore, the best choice is B.

An Individual in the 15% Tax Bracket Purchases a 6