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kolezko [41]
3 years ago
8

A municipal bond is paying a 6 percent annual yield. An equivalent risk corporate bond is paying 7 percent. Investors with a tax

rate of ________ or higher would prefer the municipal bond.
Business
1 answer:
masha68 [24]3 years ago
7 0

Answer:

14.29% or higher

Explanation:

Municipal bonds interest rates are tax free. Corporate bond rates however are have tac benefits through tax shield.

The formula for aftertax corporate bond rate = pretax rate(1-tax)

pretax rate = 7% or 0.07 as a decimal

aftertax rate(to be indifferent between the two) = 6% or 0.6

In order to be indifferent, the tax rate would be;

0.07 ( 1- tax ) = 0.06

0.07 - 0.07tax = 0.06

0.07 - 0.06 = 0.07tax

0.01 / 0.07 = tax

tax = 0.1429 or 14.29%

Therefore, Investors with a tax rate of 14.29% or higher would prefer the municipal bond.

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Ben Perez is driving along a mountain road. In the distance, he sees a road crew working on a fallen tree that has blocked the h
Morgarella [4.7K]

Answer:

B. Exposure.

Explanation:

The act exhibited by the highway crew can easily be explained to be exposure because of his stance from a mountain end and their reaction.

Measurement of exposure is generally defined as some form of

the amount of travel, either by vehicle or on foot. Once the amount of travel

is known for certain activities, or road users, and if we know the number of

crashes that are associated with that activity or population, the associated

risk can be calculated. Also the various ways of measuring the amount of travel are referred to collectively as exposure

data because they measure traveller’s exposure to the risk of death or

injury.

7 0
3 years ago
Orion would like to go on a trip to Ireland in two years. He wants to have $3,000 for the trip, so he is planning to invest mone
denis-greek [22]

Answer:

The answer is: If Orion wants to have $3,000 in two years, he must invest $2,572.02 today

Explanation:

To determine how much money Orion has to invest today in order to have $3,000 in two years, considering he will get an 8% compound interest rate, we can use this formula:

P = FV / (1 + r)²    

Where:

  • FV = $3,000
  • r = 8%

P = $3,000 / (1 + 8%)²

P = $3,000 / 1.1664

P = $2,572.02

4 0
3 years ago
The accountant for Main Street Jewelry Repair Services, Inc. forgot to make an adjusting entry for Depreciation Expense for the
charle [14.2K]

Answer:

C) Total assets are overstated.

Explanation:

The journal Entry for the Depreciation is as follows:

Dr. Depreciation Expense          xxx

Cr. Accumulated Depreciation   xxx

By missing this Journal entry the Accumulated depreciation account will be understated as we know that this is a contra asset account and this will net off the Long term assets. So, as a result the total asset will be overstated.

8 0
3 years ago
As one of the top managers at DropLabs, Henry ensures that all his employees are given the right to speak freely with their mana
Mice21 [21]

Answer:

The Common Good Ethics Approach.

Explanation:

It is been argued that the best society is been guided by the people's general will.This was postulated by a French philosopher by name Jean Jacques Rousseau who lived in the year 1712 to 1778.

This approach to Ethics empathizes respect and compassion for others,most especially those vulnerable.

The employers ability to voice out their grievances,suggestions and contributions to the daily running of the organisation coupled alongside the mangers compassion and respect for all individuals confirms to my first statement which says 'The best society is been guided by the people's will ' and that supports the common good Approach.

4 0
3 years ago
Read 2 more answers
Athens Delivery Service is hired on October 31, 2018 to perform services, beginning on November 1, 2018. The delivery services w
solmaris [256]
  1. Answer: $6600  Explanation: Athens' entered into a contract to deliver services from November 1. This contract is valid for 6 months. Their fiscal year ends on December 31. This means that only 2 months worth of services will be delivered in 2018. Even if Athens received cash for the full 6 months they can only record the revenue when they have fulfilled the obligations and rendered the service.  Because only 2 months were rendered in 2018, they can only record $6600 ($3300 × 2 months) in the 2018 fiscal year. The outstanding 4 months' balance will remain in income received in advance account until these 4 months' services are actually rendered and the obligation is fulfilled by Athens.
7 0
3 years ago
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