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Anna71 [15]
3 years ago
5

A corporate bond pays 6.25 percent interest. How much would a municipal bond have to pay to be equivalent to this on an after ta

x basis if you are in the 28 marginal percent tax bracket?A) 7.82 percentB) 5.79 percentC) 4.50 percentD) 7.26 percentE) 8.38 percent
Business
1 answer:
garri49 [273]3 years ago
5 0

Answer:

C) 4.50 percent

Explanation:

It is given that :

Interest a corporate bond pays = 6.25 percent

The marginal percent tax bracket is given as : 28 %

We have to find the amount that the municipality bond shall pay to be the equivalent to the amount after the tax basis :

We known that the municipal bond is tax exempted after the corporate tax bond should be equal to the municipal bond to be indifferent.

Thus, rate of return = rate of return after tax = rate x (1 - tax rate)

                                                                         = 6.25 % x (1 - 0.28)

                                                                         = 4.50 %

Therefore the answer is   = 4.50 %

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Answer:

The correct answer is option B.

Explanation:

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For instance, amortization of a loan means spreading the interest and principal of the loan over its lifetime. It means fixed monthly payments of interest and principal.  

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A toy manufacturer has excellent sales figures for its toys in country P but inadequate figures in the neighboring country R. In
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The method of forecasting that this example illustrate is analogy. Forecast by analogy refers to the forecasting method which simply assumes that two different kinds of situations have identical models and therefore share the same model of behaviour.

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If we believe that "variety is the spice of life," then we should be more concerned about the excess capacity in monopolistic co
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Answer:

Crazy Delicious Inc.

The standard direct materials cost per bar of chocolate is:

= $0.21.

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a) Data and Calculations:

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Cocoa            480 lbs.   $0.30 per lb.       $144.00

Sugar             150 lbs.    $0.60 per lb.          90.00

Milk                120 gal.    $1.20 per gal.       144.00

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Value may be defined as the ratio of bundled benefits received to the cost incurred by the customer to receive those benefits. _
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