Tax Effective Investments What Is The Implicit Tax Rate?

What is the implicit tax rate? - tax effective investments

Sienna, Inc., is in front of a marginal tax rate of 25% and the average tax rate of 17.5% and a marginal tax rate of 16.8%. Sienna is planning to invest in bonds of Kiowa County, currently pays a yield of 5% (equivalent taxable bonds and pay the 8% yield).


a. What is the implicit tax on the link Kiowa County
b. Kiowa County links are a good investment in Siena. Why?