To decide whether to pay out money via a dividend or repurchase, you have collected the following data on municipal and corporate bond yields.
Year(1) Bloomberg 1-year AAA Corporate Debt(2) Bloomberg 1-year AAA Muni Debt(3)
Annual Average Month end yield (%):
1995 6.25 4.17
1996 5.89 3.81
1997 5.94 3.92
1998 5.44 3.68
1999 5.73 3.64
2000 6.71 4.49
2001 3.87 2.94
2002 2.37 1.87
Calculate the personal tax rate of the average investor over this time period.
(Hint: Excel makes this much easier but please use solving by hand.)