You are considering investing in taxable bonds you are in


You are considering investing in taxable bonds. You are in the 40% tax bracket. The bonds carry a 15% interest rate.

What is the after-tax yield (interest rate) on the bonds? ______________________

 

Suppose you can also invest in non-taxable bonds. What rate would those bonds have to pay for you to breakeven with what the taxable bonds pay? __________________________

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Financial Management: You are considering investing in taxable bonds you are in
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