Respuesta :
After considering all taxes, the customer's yield will be more than 4% but less than 6%.
Given that the new quotes for a 4% bond trading in the secondary market are higher than 4% which is actually a 6% basis, thus, it is expected that the customer's yield to be greater than the initial 4%. However, given that, we are looking for the customer's yield after-tax, then the net customer's yield will be less than 6%.
What are municipal bonds?
A state, municipality, or county may issue municipal bonds as a debt security to pay for capital projects like building roads, bridges, or schools. They can be compared to loans given to local governments by investors. Municipal bonds are particularly appealing to those in higher income tax brackets because they are frequently exempt from federal taxes and the majority of state and local taxes (for residents).
What are the Types of Municipal Bonds?
Governmental organizations can issue general obligation (GO) bonds, which are not supported by money from a particular undertaking, such a toll road. Dedicated property taxes serve as collateral for some GO bonds, while general revenues are used for others.
Principal and interest payments on a revenue bond are guaranteed by the issuer or by taxes on things like sales, petrol, hotel occupancy, or other fees. When a municipality issues bonds through a conduit, a different party pays the interest and principal.
Learn more about Municipal Bonds:
https://brainly.com/question/14555636
#SPJ4
