Answer:
- After-Tax return on Municipal Bond = 7%
- After-Tax Return on Corporate Bond = 6.72%
Explanation:
The main advantage that Municipal Bonds usually carry with them is that they are tax-exempt. As no taxes are paid on them, there is no need to calculate an after-tax return because it is the same as a pre-tax return.
After-Tax return on Municipal Bond = 7%
The Corporate Bond is subject to tax based on the holder's tax bracket.
After-Tax Return on Corporate Bond = 8.4 % * ( 1 - 20%)
After-Tax Return on Corporate Bond = 6.72%
<em>Considering taxes, the Municipal Bond is better. </em>
I'm not quite sure if I understand what you are asking. Buttttt if you're asking what I think then the answer is yes
Answer:
c. Investors prefer cash flows today to cash flows in the future
Explanation:
As we know that the future profits are unpredicted and non-certain so here the investor should prefer the cash flows for today for cash flows to be done in the future. In addition to this, the discount future cash flows should have the part in the absolute valuation process
Therefore the option c is correct
And, the rest of the options are wrong
Answer:
oversight.
Explanation:
Oversight can be defined as an unintentional failure to notice a mistake or error, or an unintentional failure to act upon an event caused by an error.
Both the FED and the SEC should have noticed that the financial system was in a really bad shape way before Bear Stearns and Lehman Brothers collapsed, or AIG (and others) needed a huge bailout. Apparently both the FED and SEC were all too optimistic about the market and their optimism blinded them. As always the consequences of negligent public servants were paid mostly by the average taxpayer.
