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alexgriva [62]
3 years ago
14

An investor in the 32% tax bracket is considering two investment options of equal risk: a corporate bond that yields 8.25% and a

municipal (muni) bond that yields 4.75%. Assuming the investor will select the bond with the highest yield, which bond should this investor choose
Business
1 answer:
Gala2k [10]3 years ago
7 0

Answer: Corporate bond

Explanation:

It should be noted that the municipal bond aren't taxable. Therefore, its yield will be 4.75%.

On the other hand, the After Tax Cost of the yield of the corporate bond will be:

= Yield × (1-Tax Rate)

= 8.25% × (1-35%)

= 8.25% × 65%

= 5.36%

Therefore, the Corporate Bond should be chosen since it has a higher yield.

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Michael's, Inc., just paid $2.20 to its shareholders as the annual dividend. Simultaneously, the company announced that future d
Whitepunk [10]

Answer:

The maximum price that should be paid for one share of the company today is $54.895

Explanation:

The price of a stock that pays a dividend that grows at a constant rate forever can be calculated using the constant growth model of Dividend discount model (DDM) approach. The DDM values a stock based on the present value of the expected future dividends. The formula for price today under this model is,

P0 = D1 / r - g

Where,

  • D1 is the expected dividend for the next period or D0 * (1+g)
  • r is the required rate of return
  • g is the growth rate in dividends

SO, the maximum that should be paid for this stock today is:

P0 = 2.2 * (1 + 0.048)  /  (0.09 - 0.048)

P0 = $54.895 rounded off to $54.90

5 0
3 years ago
About ____ percent of worldwide stocks of tuna, cod, and other large ocean fishes have disappeared in the last 50 years.
ehidna [41]

About ninety percent of worldwide stocks of tuna, cod, and other large ocean fishes have disappeared in the last 50 years.

Despite being present in every ocean in the world, tuna and other fishes have started disappearing. The North Atlantic, South Atlantic, as well as the Mediterranean Sea, have the worst conditions for the majority of fish species.

Bluefin, albacore, and yellowfin tuna stocks have drastically decreased as a result of years of overfishing for American and European markets. Although the Atlantic fisheries is heavily regulated, illegal fishing off the shore of coastal seas persists, particularly close to Africa, where impoverished nations cannot afford the patrols required to execute the law.

However, tuna populations cod and other large fish oceans  are declining even in the world's largest oceans, and some face extinction due to the continuous pressure of intensive commercial fishing.

To learn more about overfishing click here :

brainly.com/question/5142437

#SPJ4

8 0
2 years ago
An advantage I have a credit card is that you can’t spend more money than you actually have
tino4ka555 [31]
False credit card is taking credit (money) from the bank to pay back w interest plus when you dont pay it back you go in debt therefore ultimately leading to bankruptcy
6 0
3 years ago
You are considering investing $1,000 in a T-bill that pays 0.05 and a risky portfolio, P, constructed with 2 risky securities, X
Leokris [45]

Answer:

% in T bills = 18.92%, % in P = 81.08%

Explanation:

Portfolio return = Weighted average return

Return of portfolio P = 0.14*0.6 + 0.10*0.4

Return of portfolio P = 0.124

Let % money in T bills be x

0.11 = 0.05*x + 0.124*(1-x)

0.11 = 0.05x + 0.124 - 0.124x

0.014 = 0.074x

x = 18.92%

Hence, % in T bills = 18.92%, % in P = 81.08%

3 0
3 years ago
A company’s ______ delineates management’s aspirations for the business providing a panoramic view of ""where we are going"" and
bogdanovich [222]

Answer:

The correct word for the blank space is: strategic vision.

Explanation:

The strategic vision of a company outlines the path the organization should follow and the set of steps that are to be taken to reach the firm's objectives in the long term. Compared to the mission, the vision is in charge of answering the question of <em>what the impact of the organization's operations will be for the internal environment of the firm</em>.

3 0
3 years ago
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