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Marianna [84]
2 years ago
9

A taxable bond has a yield of 8%, and a municipal bond has a yield of 6%. At what tax bracket, would you be indifferent between

the 2 bonds
Business
1 answer:
Nataliya [291]2 years ago
4 0

Answer: 25%

Explanation:

Municipal bonds are tax-free which means that the tax bracket that would make you indifferent between the 2 bonds would be the one that brings the after-tax yield on the taxable bond to the same yield as the Municipal bond.

Assume this tax rate to be x.

8% * ( 1 - x) = 6%

8% - 0.08x = 6%

0.08x = 8% - 6%

x = (8% - 6%) / 0.08

x = 25%

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3 years ago
When should you forward instead of replying to an email
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2 years ago
If each extra worker produces four additional units of​ output, how do the total product of​ labor, average product of​ labor, a
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---------------------

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4 0
3 years ago
Which of the following is a current asset?
Rashid [163]

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4 0
2 years ago
If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, the break-even sales (units) if
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