June Tavia Is Trying to Calculate the Taxable Equivalent Yield

Multiple Choice

June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 5 percent interest and she is in the 22 percent tax bracket,what is the taxable-equivalent yield (round to nearest percent) ?

A) 4 percent
B) 5 percent
C) 6 percent
D) 7 percent
E) 8 percent