Answer:
The interest rate on corporate bond is 7.87 percent.
Explanation:
The yield on 7-year municipal bond = 4.8%
Given marginal tax rate = 39 percent
Now calculate the interest rate on 7 year corporate bond that has equal risk.
Use the below formula. Here, yield from both type of bond is equated that is yield from corporate bond and yield from municipal bond because it is given that both gives same return after tax.
Interest rate on corporate bond × (1-tax rate) = Municipal bond yield
Interest rate on corporate bond × (1- 0.39) = 4.8
Answer and Explanation:
Different things being constant, a slowdown in population growth will lead to an increase in the availability of capital per worker and output per worker.
At the steady state, output per worker will grow at the rate of g while. Thus, steady state per person output growth will be same, however total output will increase at the rate n+g.
In case of transition between steady states, during the transition phase, output per worker will grow at a rate greater than g. Overtime in the long run with a fall in population growth, total output will fall while output per worker will increase.
Answer:
The YTM is 6.45%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Coupon payment = $1,000 x 7% = $70
Selling price = P = $1,038.50
Number of payment = n = 9 years
Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
Yield to maturity = [ $70 + ( $1,000 - $1,038.5 ) / 9 ] / [ (1,000 + $1,038.5 ) / 2 ]
Yield to maturity = [ $70 - $4.28 ] / $1,019.25 = $65.72 /$1,019.25 = 0.0645 = 6.45%
Answer: this method takes longer to perfect than the bowsight method.
In instinctive aiming method. You aim at the target with your both eyes open so looking<span> at the target with the right eye closed or with the left eye closed is not true. </span> It is also not true that this method is less versatile than the bowsight method. <span>It is true that this method takes longer to perfect than the bowsight method.</span>
