1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kumpel [21]
3 years ago
5

Tonya, who lives in California, inherited a $100,000 State of California bond in 2020. Her marginal Federal tax rate is 35%, and

her marginal state tax rate is 5%. The California bond pays 3.3% interest, which is not subject to California income tax. She can purchase a corporate bond of comparable risk that will yield 5.2% or a U.S. government bond that pays 4.6% interest. What is the after-tax income from each bond
Business
1 answer:
soldi70 [24.7K]3 years ago
3 0

Answer: See explanation

Explanation:

The after-tax income from each bond is given below:

• California bond

This will be calculated as the inherited amount of California bond multiplied by the interest rate

= $100,000 × 3.30%

= $100,000 × 0.033

After tax interest revenue = $3300

Note that there are no deduction for Federal income, and California tax here.

• Corporate bond.

Inherited amount of corporate bond = $100,000

Multiply: Interest rate = 5.20%

Before tax interest revenue = ($100,000 × 5.20%) = $5,200

Less: Federal income tax = ($5,200 × 35%) = ($1,820)

Less: California tax = $5,200 × 5% = $260

Less: Federal tax benefit = ($260 × 35%) = $91

After tax interest revenue = $3,211

• U.S Government bond

Inherited amount of U.S. government bond = $100,000

Multiply: Interest rate = 4.60%

Before tax interest revenue = $4,600

Less: Federal income tax = $4,600 × 35% = $1,610

Less: California tax = $0

Less: Federal tax benefit on the state income tax paid = $0

After tax interest revenue = $4600 - $1610 = $2,990

You might be interested in
Under the Federal Insurance Contributions Act, where do the funds for Social
emmasim [6.3K]

Answer:

It is deducted from the workers

Explanation:

All employers are required to deduct social security and medicare taxes from their employees' paychecks. The deducted amounts are remitted to the government through the social security administration authority.

Therefore, the funds for Social  Security and Medicare come from the employees' paycheck. It is the workers who contribute these funds from their income.

6 0
3 years ago
he value of a share of common stock depends on the cash flows it is expected to provide, and those flows consist of two elements
nekit [7.7K]

Answer:

TRUE

Explanation:

Using the Gordon Growth Model,  we can adequately demonstrate that the dividend and price of a share are both components of the cashflow to be considered in share valuation.

Price per share is found to be D(1) / (r - g)  

where:

Do = Dividend now

D1 = Dividend in year 1

g = growth

r = required return

So we see that the market price of a share which determines the market capitalization of a company is predicted by a growth in dividends. So the benefits of holding a share will not only depend on how much the share is sold now as against how much it can be sold in the future (in order to make a gain), but also how much you can be earning until such sale occurs.

3 0
3 years ago
Economic systems differ according to which two main characteristics?
nikitadnepr [17]

Answer:

A.

Explanation:

Economic systems refers to the different ways in which a government moves and distributes the resources that the country needs, including labor, capital, entrepreneurs, physical resources and information resources. That being said the two main characteristics that explains how they differ would be who owns the factors of production which are the 5 stated above, and the methods used to coordinate economic activity.

4 0
2 years ago
If a hotel wishes to determine where to spend resources on renovations - on interior decor or on curb appeal or on recreational
creativ13 [48]

Answer:

The correct answer is True.

Explanation:

The term Business Intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis and presentation of commercial information. The objective of Business Intelligence is to support better business decision making.

The automatic aspect of Business Intelligence should not go unnoticed. Daily information monitoring allows you to evaluate performance, monitor inventory and track expenses in real time.

Planning strategies without a thorough data analysis is like aiming in the dark. Business intelligence lights the way to make the best decisions in the management of your hotel.

The usefulness of technology to take data from the environment for strategic knowledge is evident as soon as it is launched. By extracting essential data from the environment and presenting it on dashboards, business intelligence allows managers and managers to make informed strategic decisions.

------

NOTE: If you need to extend the explanation given, you can make a comment or add a new question. I will be very pleased to help you.

4 0
3 years ago
True or False: Caffeine and other energy boosters can be used to effectively compensate for fatigue.
seropon [69]
True caffeine and other energy boosters can be used to effectively compensate for fatigue.
8 0
3 years ago
Read 2 more answers
Other questions:
  • A survey of 1000 executives ranked _____________ at the top, as the ideal manager's skill.
    11·1 answer
  • Affirmative action is a policy of giving preference to those who _____.
    15·2 answers
  • If elodea is an aquatic plant, you can conclude that it releases which has into its environment as a result of photosynthesis?
    12·1 answer
  • A bond's current market value is equal to the present value of the coupon payments plus the present value of the face amount.a.
    12·1 answer
  • Vessels Corporation's net income for the most recent year was $2,532,000. A total of 200,000 shares of common stock and 200,000
    14·1 answer
  • A contractual arrangement between a parent company and an individual or firm that allows the latter to operate a certain type of
    6·1 answer
  • The mode of transportation that results in the lowest transportation cost will also lower total costs for a supply chain.
    15·1 answer
  • During the most recent month, the following activity was recorded: Twenty thousand pounds of material were purchased at a cost o
    12·1 answer
  • The Chiemsee Knee Replacement Clinic (CKRC) is a sports clinic located at the northern edge of the German Alps. It specializes i
    15·1 answer
  • In economics, decisions are necessary because ________ are scarce, while ________ are practically unlimited.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!