A taxable issue yields 5.6 percent, and a similar municipal issue yields 4.1 percent. What is...
A taxable issue yields 5.6 percent, and a similar municipal issue yields 4.1 percent. What is the critical marginal tax rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Homework Answers
For both the securities to have the same after tax return
5.6%*(1-tax rate)=4.1%
=>tax rate=1-4.1%/5.6%
=>tax rate=26.79%
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A taxable issue yields 5.6 percent, and a similar municipal
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