A corporate bond selling at par currently yields 7.5%. Amy's marginal tax rate is 20%. How much should a municipal bond selling at par yields so that Amy is indifferent between this two bonds?
Municipal bond rate = Taxed bond rate * (1-Tax rate) |
Municipal bond rate = 7.5 * (1-0.2) |
Municipal bond rate = 6 |
A corporate bond selling at par currently yields 7.5%. Amy's marginal tax rate is 20%. How...
1)- A municipal bond selling at par currently yields 7.5%. A corporate bond selling at par currently yields 10%. At what marginal tax rate would an investor be indifferent between this two bonds? 2)- A corporate bond selling at par currently yields 7.5%. Amy's marginal tax rate is 20%. How much should a municipal bond selling at par yields so that Amy is indifferent between this two bonds? 3)- A municipal bond selling at par currently yields 6.5%. Bob's marginal...
A municipal bond selling at par currently yields 6.5%. Bob's marginal tax rate is 20%.How much should a corporate bond selling at par yields so that Bob is indifferent between this two bonds?
1) The yield on a corporate bond is 12%, and it is currently selling at par. The marginal tax rate is 20%. A par value municipal bond with a coupon rate of 10% is available. Which security is a better buy? 2) Following are the features of a mortgage loan: Loan amount $100,000 Nominal interest rate 6.2% Term – 30 years (Fixed) Required: (a) Calculate the required monthly mortgage payment. (b) Calculate the amount of interest and the repayment of...
Debt issued by Southeastern Corporation currently yields 8%. A municipal bond of equal risk currently yields 5%. At what marginal tax rate would an investor be indifferent between these two bonds? 30% 37.5% 25% 33%
A 5-year corporate bond yields 8.00%. A 5-year municipal bond of equal risk yields 6.50%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.) a. 15.56 b. 14.63 c. 21.56 d. 18.75 e. 20.06 please show work
43 Assume that Bill's marginal tax rate is 22 percent. If corporate bonds pay 6 percent interest, what interest rate would a municipal bond have to offer for Bill to be indifferent between the two bonds?
A corporate bond has a yield of 3.91%. What should be the yield on a tax-exempt municipal bond (in %, to the nearest 0.01%) to make an investor with the 33% marginal tax rate indifferent between the two bonds? E.g., if your answer is 3.237%, record it as 3.24.
Assume that Bill's marginal tax rate is 22 percent. If corporate bonds pay 9 percent interest, what interest rate would a municipal bond have to offer for Bill to be indifferent between the two bonds? (Do not round your final answer.) 10.80 percent 22.00 percent 8.00 percent 7.02 percent 9.00 percent
A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield to maturity of 7.24 percent. Which of these two bonds should an investor with a marginal tax rate of 28 percent buy? A. The corporate bond because it offers a higher after-tax yield to maturity. B. The corporate bond because its stated yield to maturity of 7.24 percent is higher than the municipal bond's stated yield to maturity of 5.08 percent. CC. The municipal...
A tax-exempt municipal bond has a yield of 6.36%. What should be the yield (in %, to the nearest 0.01%) on an otherwise similar corporate bond to make an investor with the 22% marginal tax rate indifferent between the two bonds? E.g., if your answer is 7.145%, record it as 7.15.