Calculate after-tax rate of return on taxable bond


Problem:

You can invest in taxable bonds that are paying a 8.2 percent annual rate of return or a municipal bond paying a 6.75 percent annual rate of return. Assume your marginal tax rate is 21 percent.

Required:

Question: Calculate the after-tax rate of return on the taxable bond?

Note: Explain all steps comprehensively.

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Finance Basics: Calculate after-tax rate of return on taxable bond
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