flat tax rate is 30% on all income. you want to invest in two bonds. present yield to maturity is 4.36. what is the equ...
Homework Answers
rate positively .. let me know if you need any clarification..
| Municipal bond has no tax implication. | ||||
| therefore even lower yield to maturity is good for these bond | ||||
| equivalent YTM for municipal bond = | 4.36%*(1-30%) | 3.05% | ||
| therefore answer = | 3.05% | |||
Add Answer to:
flat tax rate is 30% on all income. you want to invest in two bonds. present yield to maturity is 4.36. what is the equ...
You live in a country with a flat tax rate of 30% on all income, except for certain classes of tax-free municipal bonds....
You live in a country with a flat tax rate of 30% on all income, except for certain classes of tax-free municipal bonds. You are considering investing in two bonds that are equally risky in every respect except for their tax treatment. The present yield-to-maturity on the taxable corporate bond is 4.36%. Estimate what must be the equilibrium yield-to-maturity on the corresponding tax-free municipal bond so that will bear the same after-tax return? (The answer is a percent, round your...
You live in a country with a flat tax rate of 30% on all income, except for certain classes of tax-free municipal bonds....
You live in a country with a flat tax rate of 30% on all income, except for certain classes of tax-free municipal bonds. You are considering investing in two bonds that are equally risky in every respect except for their tax treatment. The present yield-to-maturity on the taxable corporate bond is 4.36%. Estimate what must be the equilibrium yield-to-maturity on the corresponding tax-free municipal bond so that will bear the same after-tax return? (The answer is a percent, round your...
You live in a country with a flat tax rate of 30% on all income, except for certain classes of tax-free municipal bonds....
You live in a country with a flat tax rate of 30% on all income, except for certain classes of tax-free municipal bonds. You are considering investing in two bonds that are equally risky in every respect except for their tax treatment. The present yield-to-maturity on the taxable corporate bond is 4.36%. Estimate what must be the equilibrium yield-to-maturity on the corresponding tax-free municipal bond so that will bear the same after-tax return? (The answer is a percent, round your...
(7-10) You pay a 32% marginal tax rate. You are considering investing in one of two...
(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?
Personal After-Tax Yield Corporate bonds issued by Johnson Corporation currently yield 12%. Municipal bonds of equal...
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...
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...
You can invest in taxable bonds that are paying a yield of 8.2 percent or a...
You can invest in taxable bonds that are paying a yield of 8.2 percent or a municipal bond paying a yield of 6.75 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16) b. Which security bond should you buy? Rate of return b. The security bond one should buy is es
Question 15 1p You can invest in taxable bonds that are paying a yield of 9.6...
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
Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable securities....
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 9.5%, state of Florida muni bonds, which yield 4.5% (but are not taxable), and AT&T preferred stock, with a dividend yield of 8%. Shrieves' corporate tax rate is 40%, and 70% of the dividends received are tax exempt. Find the after-tax rates of return on all three securities. Round your answers to two decimal places. After-tax...
Currently, the term structure is as follows: One-year bonds yield 7.25%, two-year bonds yield 8.25%, three- year bo...
Currently, the term structure is as follows: One-year bonds yield 7.25%, two-year bonds yield 8.25%, three- year bonds and greater maturity bonds all yield 9.25% You are choosing between one- two-, and three- year maturity bonds all paying annual coupons of 8 25%, once a year. You strongly believe that at year-end the yield curve will be flat at 9.25% a. Calculate the one year total rate of return for the three bonds (Do not round Intermediate calculations. Round your...
(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?
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...
You can invest in taxable bonds that are paying a yield of 8.2 percent or a municipal bond paying a yield of 6.75 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16) b. Which security bond should you buy? Rate of return b. The security bond one should buy is es
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
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 9.5%, state of Florida muni bonds, which yield 4.5% (but are not taxable), and AT&T preferred stock, with a dividend yield of 8%. Shrieves' corporate tax rate is 40%, and 70% of the dividends received are tax exempt. Find the after-tax rates of return on all three securities. Round your answers to two decimal places. After-tax...
Currently, the term structure is as follows: One-year bonds yield 7.25%, two-year bonds yield 8.25%, three- year bonds and greater maturity bonds all yield 9.25% You are choosing between one- two-, and three- year maturity bonds all paying annual coupons of 8 25%, once a year. You strongly believe that at year-end the yield curve will be flat at 9.25% a. Calculate the one year total rate of return for the three bonds (Do not round Intermediate calculations. Round your...
Most questions answered within 3 hours.
-
lease solve all the
questions, don't need to explanations
Q1 - All animal
species have general...
asked 58 minutes ago -
Business Phasing
1.Discuss the logical progression for growing a business, which
starts from the initial idea...
asked 1 hour ago -
Modify
When executing on the command line having only
this program name, the program will accept...
asked 2 hours ago -
Kenny Electric Company's noncallable bonds were issued several
years ago and now have 20 years to...
asked 2 hours ago -
find H(e^Jtheta) at theta= 0, pi/10, pi/20, pi/2 for
the following:
a) H(e^Jtheta)= 1+e^Jtheta
b) H(e^Jtheta)=...
asked 3 hours ago -
Home Corporation will open a new store on January 1. Based on
experience from its other...
asked 3 hours ago -
In a neoclassical model, use the IS-LM to analyze the effect of
a permanent money supply...
asked 3 hours ago -
An electron passes through a point 2.67 cm from a long straight
wire as it moves...
asked 4 hours ago -
A grammar is a 4-tuple G, G = (Ν, Σ, Π, Σ, S) where, Ν is...
asked 5 hours ago -
In this part, calculate the present values. Use the Excel PV
function to compute the present...
asked 5 hours ago -
Part 1. Primitive Types, Sorting, Recursion for
Homework.java
a) Implement the static method initializeArray that receives...
asked 6 hours ago -
Using C++, build a sorter that can rank a sequence of numbers in
a descending order....
asked 6 hours ago