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.
Calculate the after-tax return of a 6.35 percent, 20-year, A-rated corporate bond for an investor in...
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...
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 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...
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, _____.
Based on the after-tax returns, at what federal tax rate is an investor better off choosing a tax-exempt 6.75 percent municipal bond over a taxable 9.78 percent corporate bond? The after-tax return on the corporate bond when the tax rate is 10% is ?
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.
of 25.1 An investor buys percent, what is his after-tax yield? a corporate bond that pays an interest rate of 8.35 percent. If the investor pays a marginal tax rate Enter answer in percents, accurate to two decimal places.
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 client in the 35 percent marginal tax bracket is comparing a municipal bond that offers a 5.20 percent yield to maturity and a similar- risk corporate bond that offers a 6.80 percent yield. Determine the equivalent taxable yield. (Round your answer to 2 decimal places.) Equivalent taxable yield % Which bond will give the client more profit after taxes? O corporate bond O municipal bond
A bond investor is considering two 10 year maturity bonds both rated AA: the municipal bond is yielding 2.47% and the corporate bond is yielding 4.36%. At what marginal tax rate would the bond investor be indifferent between the two bonds?