a taxable bond pays 7.8% and a municipal bond pays 5%. what must your marginal tax rate be to make you indifferent between the two bonds
Municipal bond yield = Taxable bond yield * (1 - marginal tax rate)
(1 - marginal tax rate) = 5% / 7.8%
Marginal tax rate = 36%
a taxable bond pays 7.8% and a municipal bond pays 5%. what must your marginal tax...
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
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.
Municipal bonds are tax-exempt from the Federal income tax. Assume a new 10-year municipal bond has a 3%/year coupon rate. What would be the required coupon rate on a taxable bond for an investor to be indifferent in holding a taxable bond compared to the 3% tax-free bond? Assume the investor is in a 40% marginal income tax bracket. Both bonds have the same credit quality. 5.0% 1.8% 1.2% 7.5% 3.0%
A municipal bond has a YTM of 4.59 percent while the YTM of a comparable taxable bond is 7.48 percent. What is the tax rate that will make an investor indifferent between the municipal bond and the taxable bond?
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?
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.
Municipal bond M pays a yield of 6.77 percent, if your marginal tax rate is 28 percent, Calculate the tax equivalent yield (round your answers to 3 decimal places. e.g., 32.161) Multiple Choice 9.403% 9.420% 9.395% 9.412%
(7-10) You pay a 32% marginal tax rate. You are considering investing in one of two bonds. First, there is a tax-free municipal bond that pays 4.30%. There is also a corporate (taxable) bond available with the same maturity and equal risks in all other senses to the municipal bond. In order to realize the same after-tax return for you, what rate must the corporate bond yield?
A bond investor is considering two 10 year maturity bonds both rated A: the municipal bond is yielding 2.40% and the corporate bond is yielding 3.25%. At what marginal tax rate would the bond investor be indifferent between the two bonds? Enter your answer rounded off to two decimal points.