1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ziro4ka [17]
3 years ago
6

Carter Corporation has some money to invest, and its treasurer is choosing between City of Chicago municipal bonds and U.S. Trea

sury bonds. Both have the same maturity, and they are equally risky and liquid. If Treasury bonds yield 6%, and Carter's marginal income tax rate is 40%, what yield on the Chicago municipal bonds would make Carter's treasurer indifferent between the two
Business
1 answer:
padilas [110]3 years ago
3 0

Answer:

If Chicago municipal bonds yield  is 10% then Carter's treasurer make indifferent between the two.

Explanation:

Because Treasury Bond is exempt from tax income and both have same maturity, and they are equally risky and liquid; we then have the equation as below

Treasury bonds yield = Chicago municipal bonds yield after tax

⇔ 6% = Chicago municipal bonds yield * (1 - tax rate 40%)

⇔ 6% = Chicago municipal bonds yield * 0.6

⇒ Chicago municipal bonds yield = 6%/  0.6 = 10%

You might be interested in
Which type of account typically has low liquidity? AMoney Market Account BCertificate of Deposit (CD) CChecking Account DSavings
natta225 [31]
Likely B. Liquidity is basically the measurement of how quickly a given investment can be turned into cash. If you can sell it or take money from it quickly, it is liquid. Any one of the others (A, C or D) can be withdrawn from in a short time, and thus are very liquid. CDs, however, are set to a specified amount of time. You deposit money for, say, 5 years and then are allowed to withdraw it, not before. Thus, it is not liquid.
8 0
3 years ago
Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these
Vladimir79 [104]

Answer:

option (b) $4,200 gain

Explanation:

Data provided in the question:

Par value of outstanding bonds  = $119,000

Carrying value of the bonds = $108,700

Price at which bond is called = $104,500

Now,

Gain on the retirement is calculated using the relation as;

Gain on retirement

= Carrying value of Bonds - Price at which bond is called

= $108,700 - $104,500

= $4,200

Since, the result is positive, therefore a gain will be recognized

Hence, correct answer is option (b) $4,200 gain

6 0
3 years ago
A friend says, “i want to minimize my risks of organ damage and long-lasting mental change,” and then asks, “what kind of drug s
SSSSS [86.1K]
I would say all all of them that doctor don't recommend.
3 0
3 years ago
The ________ section details the tactics the firm will use to develop, market, and sell the offering.a. executive summarySelect
r-ruslan [8.4K]

Answer:

The correct answer is letter "B": strategy.

Explanation:

The strategy section of a business plan highlights all the techniques the firm could carry out to produce, publish, and sell its goods or services. Besides, in this section, the main problems a company might face during operations are exposed and the methods specialists will implement to attempt to figure out those situations.

3 0
4 years ago
Which individual can use the head of household filing status?
Lana71 [14]

Answer:

A. A married person with children

Explanation:

That person would be the head because he would be in charge.

8 0
3 years ago
Other questions:
  • Kelsey wants to know what the main purpose of the visuals in the committee's report will be. what will you tell him?
    13·1 answer
  • A good with many close substitutes is likely to have relatively ______ demand, since consumers can easily choose to purchase one
    13·1 answer
  • Before purchasing a car, John sought advice from his friends and researched auto reviews on the Internet. He also visited car de
    9·1 answer
  • Amy is the founder of a small IT firm that specializes in social networking applications. She meets weekly with the members of h
    6·1 answer
  • I always feel like throwing up in school. I tried chewing gun and having mints, but nothing is helping. Does anyone have and sug
    11·2 answers
  • Uptown Interior Designs is an all equity firm that has 40,000 shares of stock outstanding. The company has decided to borrow $1
    13·1 answer
  • A person of color has been working at consulting firm for a few years and has noticed that despite his best efforts and outstand
    7·1 answer
  • Assume that the demand for coal is more elastic than the supply. A tax on coal will a. increase the price of coal that sellers r
    14·1 answer
  • The difference between a company's strategy and a company's business model is that.
    13·1 answer
  • Upon beginning her career at Davidson Inc., a small consulting firm, Stephanie Benjamin receives a copy of the firm's organizati
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!