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Nina [5.8K]
3 years ago
14

Joe is considering 2 similar bonds, with the only difference that: (1) a tax-exempt municipal bond promises a 5.625% annual retu

rn, (2) a taxable corporate bond promises a 7.5% annual return. If Joe's tax rate is 25%, which bond should he buy?
a. Either one, both have the same after-tax yield
b. Municipal bond, as it has a higher after-tax yield
c. Corporate bond, as it has a higher after-tax yield
d. Not enough information is given to answer the question
Business
1 answer:
Dahasolnce [82]3 years ago
6 0

Answer:

a. Either one, both have the same after-tax yield

Explanation:

we have to calculate the after tax return of the bonds:

after tax return of corporate bonds = bond yield x (1 - tax rate) = 7.5% x (1 - 25%) = 7.5% x 0.75 = 5.625%

since municipal bonds are not included as part of Joe's gross income, their after tax rate is equal to their yield = 5.625%

both bonds yield the same after tax return = 5.625%

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Option C

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In work ethics, workers are not permitted to work stationary for home use because the content is meant to be used for workplace purposes. A legal pad can be removed without permission from school, and stealing should therefore be discouraged. Consult with the store man in charge to permit you to take the office to be used at home.

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Answer:

Explanation:

X001 Sales volum = 3000*$20 = $60,000

X002 Sales volum = 3000*$10 = $30,000

Total $90,000

Allocated to X002 based on sales volum is 33.33% (30,000/90,000) of the 60,000, which is $20,000

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You have $7,600 to deposit. Regency Bank offers 12 percent per year compounded monthly (1.0 percent per month), while King Bank
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Answer:

Regency Bank : $51,347.27

King Bank : $46,590.99

Explanation:

The formula for calculating future value:

FV = P (1 + r)^mn

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

m = number of compounding

Regency Bank : $7,600 x (1.01)^(16 x 12) = $51,347.27

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Answer:

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Economic gain usually comes with promotion. It will motivate me to do more for the company.

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