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liubo4ka [24]
3 years ago
11

A corporate bond currently yields 8.5 percent. Tax-except municipal bonds with the same risk, maturity, and liquidity currently

yield 5.5 percent. At what tax rate would investors be indifferent between the two bonds? a. 35.29% b. 40.00% c. 24.67% d. 64.71% e. 30.04%
Business
1 answer:
3241004551 [841]3 years ago
4 0

Answer:

a. 35.29%

Explanation:

The computation of the tax rate that could be non-different between the two bonds is shown below:

Given that

Corporate Bond yield = 8.5%

Municipal bonds yield = 5.5%

based on the above information

Tax Rate  is

= 1 - ( Municipal bonds yield - Corporate Bond yield)

= 1 - (5.5% ÷ 8.5%)

= 35.29%

Hence, the tax rate is 35.29%

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

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Answer:

marketing strategies

Explanation:

yeah

6 0
3 years ago
The basic principles of economics suggest that_________.
Montano1993 [528]

Answer:

Answer is option d, i.e. All of the above are correct.

Explanation:

All the given statements are correct.

Markets are considered to be the best way to organize economic activity, and this can be done by studying the market trends and various demands of the customers. This would help in assessing the estimation of supply that any organization would like to deliver to its respective customers. Similarly, the intervention of government and legal aspects are also important in maintaining both, the trade between the companies of different countries, and also if any organization fails to produce and deliver the required result.

5 0
3 years ago
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment in City of Heflin bonds. (U
Andrew [12]

Answer:

Given that,

Taxable income = $75,000

Interest from an investment = $10,000

Using the U.S tax rate schedule in 2017

(a) Federal tax will he owe = $5,226.25 + 25% × ($75,000 - $37,950)

                                            = $5,226.25 +  $9262.5

                                            = $14,488.75

(b) Average\ Tax\ Rate = \frac{Total\ Tax}{Taxable\ Income}

    Average\ Tax\ Rate = \frac{14,488.75}{75,000}

                                             = 19.32%.

(c)Effective\ Tax\ Rate = \frac{Total\ Tax}{Total\ Income}

Effective\ Tax\ Rate = \frac{14,488.75}{75,000 + 10,000}

                                        = 17.05%          

(d) Chuck is currently in the 25 percent tax rate bracket.

His marginal tax rate on increases in income up to $16,900 and deductions from income up to $37,050 is 25 percent.                                                

6 0
3 years ago
Branford has one share of stock and one bond. The total value of the two securities is $1,200. The bond has a YTM of 10.2%, a co
riadik2000 [5.3K]

Answer:

The price of the stock is expected to be $188.16 in 1 year.

Explanation:

This can be determined as follows:

Current price of the stock = Expected next dividend / Expected return = $24.87 / 15.2% = $163.62

Expected stock price in 1 year = Current price of the stock * (100% + Expected return)^Number of year = $163.62 * (100% + 15.2%)^1 = $188.16

Therefore, the price of the stock is expected to be $188.16 in 1 year.

8 0
3 years ago
A business has a fixed costs of US$100 000 and variable costs of US$5 per unit.
OLga [1]

Answer:

$250,000

Explanation:

50,000 units × $5 per unit = $250,000

4 0
3 years ago
Read 2 more answers
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