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zhannawk [14.2K]
3 years ago
5

A 7-year municipal bond yields 4.8%. Your marginal tax rate (including state and federal taxes) is 39.00%. What interest rate on

a 7-year corporate bond of equal risk would provide you with the same after-tax return
Business
1 answer:
Vera_Pavlovna [14]3 years ago
8 0

Answer:

The interest rate on corporate bond is 7.87 percent.

Explanation:

The yield on 7-year municipal bond = 4.8%

Given marginal tax rate = 39 percent  

Now calculate the interest rate on 7 year corporate bond that has equal risk.

Use the below formula. Here, yield from both type of bond is equated that is yield from corporate bond and yield from municipal bond because it is given that both gives same return after tax.

Interest rate on corporate bond × (1-tax rate) = Municipal bond yield

Interest rate on corporate bond × (1- 0.39) = 4.8\text{Interest rate on corporate bond} = \frac{4.8}{0.61} = 7.87 \  percent

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Answer:

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Explanation:

European goldsmiths (Italian goldsmiths were the first) formulated a principle that only 5% of deposits were needed in reserve at any particular time, therefore they could lend 95% of the gold they held in deposit.

Goldsmiths would rent space in their vaults that allowed other people to keep their gold in a safe place. That led to transactions were notes indicating the amount of gold deposited would be traded instead of trading gold itself.

Eventually goldsmiths discovered that they could trade (lend) more money than the amount of gold they held in deposits, inventing fractional reserve banking.

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What do people purchase as a form of risk management to protect themselves from losing a lot of money in the event something hap
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They purchase insurance.
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Answer:

The Adjusted trial balance is

Explanation:                                                 Amount in $

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Accounts Payable                                                           38,882

Intangible Assets                                 82,031

Accounts Receivable                           56,057

Interest Expense                                     4,089  

Accrued Expense Payable                                               58,333

Interest Revenue                                                                    732

Accumulated Deprecation                                               337,564

Inventories                                              27,410

Capital                                                                                  48,012

Land                                                         32,890

Advertising Expense                              63,473

Long Term Debt                                                                 230,561

Buildings & Leasehold                            203,651

Long Term Note Receivable                     12,821

Cash                                                            20,142

Other Assets                                              42,540

Common Stock                                                                      483

Other Long Term Liabilities                                                64,213      

Capital & Retained Earning                                                418,279

Prepaid and Other Current assets        36,838

Depreciation Expense                           39,995

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Equipment                                              320,520        

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