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    Municipal Bonds

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    Jacqui Velasquez, a treasury assistant, is considering the purchase of municipal notes but needs to compare their tax-advantaged yield with the yield on taxable securities. The company's marginal federal tax rate is 34%.
    a. What advice would you give Jacqui about comparing these securities?
    b. If she is considering a muni that is yielding 5%, how high must the taxable rate be to provide a higher after-tax yield on the taxable security?

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    https://brainmass.com/business/accounting/taxable-rate-provide-higher-after-tax-yield-taxable-security-278483

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    Jacqui Velasquez, a treasury assistant, is considering the purchase of municipal notes but needs to compare their tax-advantaged yield with the yield on taxable securities. The company's marginal federal tax rate is 34%.
    a. What advice would you give Jacqui ...

    Solution Summary

    The expert compares yields on municipal bonds and taxable securities.

    $2.19

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