An investor purchases one municipal bond and one corporate bond that pay rates of return of 7% and 8.5%, respectively. If the investor is in the 20% tax bracket, his after-tax rates of return on the municipal and corporate bonds would be, respectively, _____. |
An investor buys a T-bill at a bank discount quote of 5.40 with 90 days to maturity. The investor's actual annual rate of return on this investment is _____. |
What is the tax exempt equivalent yield on a 14% bond yield given a marginal tax rate of 24%? |
A T-bill quote sheet has 90-day T-bill quotes with a 5.02 bid and a 4.96 ask. If the bill has a $10,000 face value, an investor could buy this bill for _____. |
The Chompers Index is a price weighted stock index based on the 3 largest fast food chains. The stock prices for the three stocks are $82, $37, and $72. What is the price weighted index value of the Chompers Index? |
(1) Municipal Bond: Before-Tax Return = 7%, Tax Rate = 20 %, After-Tax Return = 7 x (1-0.2) = 5.6 %
Corporate Bond: Before-Tax Return = 8.5 %, Tax Rate = 20 %, After-Tax Return = 8.5 x (1-0.2) = 6.8 %
NOTE: Please raise separate queries for solutions to the remaining unrelated questions, as one query is restricted to the solution of only one complete question with up to four sub-parts.
An investor purchases one municipal bond and one corporate bond that pay rates of return of...
An investor purchases one municipal bond and one corporate bond that pay rates of return of 4% and 5.5%, respectively. If the investor is in the 20% tax bracket, his after-tax rates of return on the municipal and corporate bonds would be, respectively, _____.
Calculate the after-tax return of a 8.15 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket. Compare this yield to a 7.16 percent, 20-year, A-rated, tax-exempt municipal bond and explain which alternative is better. Repeat the calculations and comparison for an investor in the 33 percent marginal tax bracket. The after-tax return of a 8.15 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket is 7.34 %. (Round...
Calculate the after-tax return of a 6.35 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket. Compare this yield to a 4.85 percent, 20-year, A-rated, tax-exempt municipal bond and explain which alternative is better. Repeat the calculations and comparison for an investor in the 35 percent marginal tax bracket.
question 2. Calculate the after tax return of a 9.17 percent, 20 year, A-rated corporate bond for an investor in the blank percent marginal tax bracket. Compare this yield to a 7.96percent, 20 year, A rated, tax exempt municipal bond and explain which alternative is better. Repeat the calculations and comparison for an investor in the 33percent marginal tax bracket. The after tax return of a 9.17 percent, 20 year, A-rated corporate bond for an investor in the 15 percent...
An investor is indifferent between holding a corporate bond with a before-tax yield of 6.61% and a tax-exempt municipal bond with a yield of 4.51%. What is the marginal tax rate of the investor, in %, to the nearest 0.1%? E.g., if your answer is 27.13%, enter it as 27.1.
A tax-exempt municipal bond has a yield to maturity of 4.99%. An investor, who has a marginal tax rate of 30.00%, would prefer and an otherwise identical taxable corporate bond if it had a yield to maturity of more than ____%.
Personal After-Tax Yield Corporate bonds issued by Johnson Corporation currently yield 12%. Municipal bonds of equal risk currently yield 6%. At what tax rate would an investor be indifferent between these two bonds? Round your answer to two decimal places. % Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 9.25%, state of Florida muni bonds, which yield 6% (but are not taxable), and AT&T...
Personal After-Tax Yield Corporate bonds issued by Johnson Corporation currently yield 9.5%. Municipal bonds of equal risk currently yield 6%. At what tax rate would an investor be indifferent between these two bonds? Round your answer to two decimal places. 010 Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 9%, state of Florida muni bonds, which yield 5% (but are not taxable), and AT&T...
A 4.5 percent coupon municipal bond has 10 years left to maturity and has a price quote of $977.50. The bond can be called in four years. The call premium is one year of coupon payments. What is the bond's taxable equivalent yield for an investor in the 33 percent marginal tax bracket? (Assume interest payments are paid semi-annually)
Both coupon rate and price quote is not correct QUESTION 1 An investor wants to compare the rate of return on a T-bill to that on a corporate bond. Which one of the following is a direct measure of the T-bill rate of return that facilitates comparison across different debt securities? 0 Coupon rate O Asked O Bid Price quote O Asked yield O Par value Bid yield