Equivalent Taxable Yield • rm = r(1-t) r = rm/(1-t) Example: Suppose your tax rate is...
s Calculation (20%) Table 2.2 Tax-Exempt Yield Equivalent taxable yields corresponding to various tax-exempt yields 2% 3% 4% 5% 1% Marginal Tax Rate 125% 2.50% 3.75% 5.00% 6.25% 20% 30 1,43 2.86 4.29 5.71 7.14 40 1.67 3.33 5.00 6.67 8.33 50 2.00 4.00 6.00 8.00 10.00 Suppose your tax bracket is 40%, would you rather hold a 7% taxable bond or a % tax-free bond? What is the equivalent taxable yield of the 5%tax-free yield? s Calculation (20%) Table...
7. Suppose the tax rate is 25% and the taxable bond yield is 8% What is the equivalent tax. exempt bond yield? 2.3% 6% o 2% o 6.9%
What is the bond equivalent yield of a bond if it has 200 days to maturity, a par value of $10000, and is currently trading at $9780? Enter your answer as a decimal, rounded to 4 decimal places. Your Answer: Answer Question 4 (1 point) suppose that short-term municipal bonds currently offer yields of 4%, while comparable taxable bonds pay 5%, which gives you the higher after-tax yield if your tax bracket is 30%? Municipal bonds Taxable bonds Question 5...
An investor is trying to decide between a muni paying 4 percent or an equivalent taxable corporate paying 7 percent. What is the marginal tax rate the investor must have to consider buying the municipal bond? Group of answer choices 42.85% 40% 33.85% 33.5%
What's the taxable equivalent yield on a municipal bond with a yield to maturity of 5.25 percent for an investor in the 25 percent marginal tax bracket? (Round your answer to 2 decimal places.) Multiple Choice 1.31% 21.00 % 5.25% 7.00%
45 Find the equivalent taxable yield of the municipal bond for tax brackets of zero, 10%, 20%, and 30%, if it offers a yield of 3.40%. (Round your answers to 2 decimal places.) Equivalent Taxable Yield % a. Zero 8 01:18:01 b. 10% % C. 20% % d. 30% %
If the municipal yield is 6%, what (pre-tax) taxable yield would a private bond issuer have to offer in order to make you indifferent between the two bonds if your tax rate is 45%? I need step by step instructions please
Find the equivalent taxable yield of the municipal bond for tax brackets of zero, 10%, 20%, and 30%, if it offers a yield of 4.10%. (Round your answers to 2 decimal places.) Tax Brackets a. Zero % b. 10% % c. 20% % d. 30% %
What is the taxable-equivalent yield (TEY) on a municipal bond with a 4.50% coupon, if you are in the 35% tax bracket
Question 15 1p You can invest in taxable bonds that are paying a yield of 9.6 percent or a municipal bond paying a yield of 7.85 percent. Assume your marginal tax rate is 21 percent. What is the after-tax rate of return on the taxable bond? 6.20% 12.15% 7.58% 9.59% None of these is correct