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Julli [10]
3 years ago
9

A 5-year corporate bond yields 9.70%. A 5-year municipal bond of equal risk yields 6.5%. Assume that the state tax rate is zero.

At what federal tax rate are you indifferent between the two bonds?a. 25.40%
b. 29.03%
c. 32.99%
d. 33.98%
e. 27.38%
Business
1 answer:
Roman55 [17]3 years ago
3 0

Answer:

c. 32.99%

Explanation:

Risk yield = bond yield*(1 - Federal tax rate)

    6.50% = 9.70%*(1 - Federal tax rate)

1 - Federal tax rate = 6.50%/9.70%

Federal tax rate = 1 - 6.50%/9.70%

                           = 32.99%

Therefore, The federal tax rate that you are indifferent between the two bonds is 32.99%

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Answer: Housing, Food, Bills, Transportation

Explanation: common sense my guy

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Financial data for Stirling Inc. for last year are as follows:
Tom [10]

Answer:

profit margin: 6.04%

Assets turnover: 2.08

ROI 25.89%

Residual Income 137,330

Explanation:

<u><em>profit margin:</em></u>

income/sales = 326,480/5,404,000 = 0.060414507 = 6.0414507%

<u><em>Assets turnover:</em></u>

\frac{net \: sales}{average \: assets} \\\\where:\\average \: assets = \frac{ending + beginning}{2}

(2,561,000 + 2,629,000)/2 = 2,595,000 average assets

5,404,000/2,595,000 = 2.082466281 Assets TO

<u><em>ROI</em></u>

\frac{net \: income}{average \: equity} \\\\where:\\average \: equity= \frac{ending + beginning}{2}

(1,206,000+1,316,000)/2 = 1,261,000 average equity

326,480/1,261,000 = 25.890563%

<u>Residual Income:</u>

current income - income at desired RoR

That means calculate which income generates a ROI of 15% which is the minimum required return:

ROI = income / equity = 0.15

X/1,261,000 = 0.15

X=1,261,000 x 0.15 = 189,150

Now we calculate the diference between this number and the current income.

326,480 - 189,150 = 137,330 Residual Income

8 0
3 years ago
Your boss is considering a 5-year investment project. If the project is accepted, it would require an immediate spending of $678
marusya05 [52]

Answer:

$50.47

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Cash flow in year 0 = - ($678 +  $58 ) = -736

Cash flow in year 1 - 4 = $173

Cash flow in year 5 = $173 + $144

I = 8.1

NPV = 50.47

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

7 0
3 years ago
Why does excessive fishing occur?
Diano4ka-milaya [45]

Explanation:

Growth overfishing occurs when fish are harvested at an average size that is smaller than the size that would produce the maximum yield per recruit.

8 0
2 years ago
What is meant by standards of justice haven't always been met?
lara [203]

Answer;

We have no achieved "equal justice for all" examples. women, minorities such as blacks, gays

Explanation;

-The basic law of the state is the Standard of Justice. The state is, therefore, no more than a voluntary, meritocratic public service, headed by an elected policy directorate.

-One of the purpose of government is to establish justice; The law, in both its consent and its administration, must be reasonable, fair, and impartial. Those standards of justice have not always been met in this country.

-The belief in equality before the law is called legal egalitarianism. Article 7 of the Universal Declaration of Human Rights (UDHR) states that; All are equal before the law and are entitled without any discrimination to equal protection of the law.

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3 years ago
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