Answer:
E. All the statements are correct
Explanation:
i. Corporations rarely pay tax on the interest income.
This statement is correct. Some companies do not even pay any income taxes.
ii. Higher tax bracket people tend to buy municipal bond because it is federal tax exempt.
Correct, people who have high incomes, and are subject to a high federal income tax rate often buy municipal bonds because these bonds are exempt from federal income tax.
iii. Short term capital gain and long-term capital gain are treated differently for individuals.
Correct. Short-term capital gains are those obtained from the sale of property that was owned for less than one year. This gains are often treated with the highest tax rate.
Long-term capital gains are those obtained from the sale of property that was owned for more than one year, and are treated with more favorable tax rates.
iv. The corporate tax rates in the U.S. is one of the lowest among the developed nations.
This statement is correct. The corporate tax rate in the U.S. is a nominal 21% (the effective rate can be as low as 0% for some companies). This is one of the lowest rates among developed nations, whose rates hover around 25 to 30% on average.
Answer:
$22,820
Explanation:
Calculation to determine Determine the present value of the par value of the bonds.
Discount rate =8%/2
Discount rate= 4%
Present value factor of 20 periods at 4%= ( 1 / 1.04^20 )
Present value factor of 20 periods at 4%=0.4564
Using this formula
Present value of the par value of the bond = Future value of the bond x Present value factor =
Let plug in the formula
Present value of the par value of the bond=$50,000 x 0.4564
Present value of the par value of the bond = $22,820
Therefore the present value of the par value of the bonds is $22,820
Answer:
The price of the bond is $ 21,541.53
Explanation:
The price of the bond is the present value of all cash inflows expected from the bond throughout the bond's life.
The cash inflows comprise of coupon interest interest payments as well as the repayment of the principal amount(the face value of $20,000) at redemption.
The present value is computed by multiplying the cash inflows by the discount factor.
The formula for discounting factor =1/(1+r/2)^t
r is the required yield of 5.4% divided by 2 since the coupon is payable twice a year.
Find attached.
The document that explains your rights and responsibilities as a federal student loan borrower is A. your master promissory note.
The master promissory note refers to the legal document where one promises to repay their loans and any fees or accrued interests to the Department of Education.
The <em>master promissory note</em> also explains the terms and the conditions of the loan that's taken. It's simply a legally binding document. One has to understand the rights and then responsibilities before one takes the loan.
In conclusion, the correct option is your master promissory note.
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