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AleksandrR [38]
3 years ago
11

Assume that Lucas's marginal tax rate is 32 percent and his tax rate on dividends is 16 percent. If a dividend-paying stock (wit

h no growth potential) pays an 9.20 percent dividend yield, what interest rate would a municipal bond have to offer for Lucas to be indifferent between the two investments from a cash-flow perspective
Business
1 answer:
kipiarov [429]3 years ago
3 0

Answer:

The correct answer to the problem is 7.728%

Explanation:

Lucas marginal tax rate = 32 percent

Tax rate on dividends = 16 percent

Dividend yield of a dividend-paying stock (with no growth potential) = 9.20 percent.

To determine the interest rate a municipal bond have to offer for Lucas to be indifferent between the two investments from a cash flow perspective =

Dividend yield multiplied by ( 1- tax rate on dividends)

= 9.20% × (1 - 16%)

= 0.092 × (1 - 0.16)

= 0.092 × 0.84

= 7.728%

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GuDViN [60]

Answer:

0.0416483 or 4.16%

Explanation:

Annual percentage rate, APR = 4%

Value of toys sold = $200,000

Note period = 90 day

N = 365 ÷ 90

= $200,000 × [1 - (0.04 × 90/360)]

= $198,000

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2 years ago
Please help need this done for class tomorrow!
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Answer:

0.31

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0.72/2.3 = 0.31

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Within his role as a financial accountant, Roger uses the capital asset pricing model and other mathematical tools to help clien
Agata [3.3K]

Answer:

A. Quantitative perspective

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