Leeds School of Business | University of Colorado Boulder

Taxable equivalent yield = tax-exempt municipal yield. 1.0 - marginal tax rate. The taxable equivalent yield for a tax-exempt yield of 5.5%, for an investor in a 15% tax bracket, is. Taxable equivalent yield = .055 / [1-.15] = 6%. 2-2. According to the problem, the corporate bond yields 8.4 (1-.28) = 6 percent after tax. The municipal bond has ... ................
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