Answer: 20%
Explanation:
Municipal Bonds are generally not taxed so if you invest in the Municipal bond, the tax rate does not affect you.
The tax rate therefore that will make you indifferent between the 2 options is the one that will take the Corporate bond returns of Jefferson to 8% so that both bonds may give you the same return after tax.
Assuming that tax rate is 'x' then,
8 = 10 (1 - x)
8 = 10 - 10x
10x = 10 - 8
10x = 2
x = 20%
At a tax rate of 20%, the Corporate bonds give an 8% return.
Answer:
If the social cost of an activity exceeds the costs relevant to the decision makers in the activity , there is an external diseconomy . If the benefits of an activity exceed its marginal cost , there is an external economy .
Explanation:
Thaats whaaat upp
Answer:
Market price today $955.1347
Explanation:
To know the current market price we will calculate the present value ofthe cuopon payment and the maturity at the yield to maturity rate of 8.73%
<u>Present value of the annuity</u>
Cupon Payment: 1,000 face value x 8% / 2 payment per year = 40
time = 9 years x 2 payment per year = 18
rate = 8.73% = 0.0873 = 0.0873/2 = 0.04365
PV $491.6747
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<u>Present value of the maturity</u>
Maturity = face value = 1,000.00
time 18.00
rate 0.04365
PV 463.46
<u>Now we add both together to get the present value of the bond</u>
PV c $491.6747
PV m $463.4599
Total $955.1347
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