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Igoryamba
3 years ago
11

A corporate bond currently yields 8.5%. Municipal bonds with the same risk, maturity, and liquidity currently yield 5.5%. At wha

t tax rate would investors be indifferent between the two bonds?
Business
1 answer:
max2010maxim [7]3 years ago
6 0

Answer: 35.29%

Explanation:

Municipal Bonds are attractive in that they give the tax benefit of being tax exempt whereas a corporate bond is liable for taxation. The tax rate that will therefore make an investor indifferent between the two bonds is the one that will equate the Corporate bond's yield net of tax to the yield on the Municipal bond.

5.5% = 8.5% * ( 1 - x)

5.5% = 8.5% - 0.085x

0.085x = 8.5% - 5.5%

0.085x = 3%

x = 35.29%

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DochEvi [55]
<span>A "hypothesis" is a prediction stated in a way that permits it to be tested.

Hypothesis refers to a particular statement of prediction. It depicts in concrete (instead of theoretical) terms what you expect will occur in your investigation. Not all examinations have hypotheses. Some of the time an investigation is intended to be exploratory. There is no formal hypothesis, and maybe the reason for the investigation is to investigate some territory all the more completely keeping in mind the end goal to build up some particular theory or forecast that can be tried in future research. A solitary report may have one or numerous hypotheses.
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5 0
3 years ago
What is it about incentive systems that makes them so attractive to leaders attempting to implement organizational change
sveticcg [70]

Answer:

Incentive systems are so attractive to leaders who attempt to implement organizational change because they are powerful tools that can influence and motivate workers to embrace organizational change.

Explanation:

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4 0
3 years ago
Echo Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the ye
ozzi

Answer:

Actual overhead= $153,400

Explanation:

Giving the following information:

During the year the company's Finished Goods inventory account was debited for $360,000 and credited for $338,800. The ending balance in the Finished Goods inventory account was $36,600.

At the end of the year:

Manufacturing overhead was overapplied by $15,900.

If the applied manufacturing overhead was $169,300.

Because the manufacturing overhead was overapplied, we need to subtract from the applied overhead to determine the actual overhead.

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5 0
3 years ago
In what areas is Leslie's underspending<br> hurting her budget?
Jlenok [28]

Leslie's budget is hurting in the areas of transportation, groceries, phone and dining out.                                                                                                                                                    

<u>Explanation:</u>

For transportation, cash is required for every day. So Leslie is spending more on transportation every month. Forgoing back and forth out anyplace she will burn through cash on transportation.  

She is likewise spending cash on goods. Staple goods will be an essential one for living these days. So the financial backing is harming here.  

She is spending another hand on the telephone and eating out. For the telephone, she will energize each month. She will feast out with companions each day.

5 0
2 years ago
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