6% and 5.76% accordingly. The calculation of the after tax yield is derived from the formula and is as follows: After Tax Yiled = Pre-Tax Yield * (1- Marginal Tax Rate) and thus the after tax yield is different for people with different income rates and thus variable marginal tax rates. The holder of the shares will not pay any taxes if he does not sell any shares and thus the growth of market value of shares by 10% will lead to yield to 10% pre-tax and if the profit is fixed, into after tax yield of 7.2% which is the highest return among the other investment. Otherwise, as it is not dividend yield but capital appreciation, the tax is not paid directly....

But the risks associated with holding high growth common stock is also very big and the risks must be considered when making the investment also. The higher is the return to yield ratio the better is the investment. It would be a good idea to allocate half of the funds into the high yielding at 7.2% stocks and the remaining half not into savings account, but into municipal bonds with the risk rates of 5% pre-tax yield, which is equivalent to 3.6% after tax yield. But considering the fact that the inflation of the currency is approximately 3% annually or could even increase, the investment that yields return only half percentage point higher than…