Dennis is currently considering investing in municipal bonds that earn 6 percent interests, or in taxable bonds issued by the Coca-Cola Company that pay 8 Percent. a. If Dennis tax rate is 22 percent, which bond should he choose? Municipal bonds or Taxable Bonds. b. Which bond should he chooise if his tax rate is 32 percent? Municipal bonds or Taxable bonds. c. At what tax rate would he be indifferent between the bonds? Tax rate ? d. What Strategy is this decision based Upon? Development planning strategy, Business planning strategy, Decision planning strategy, Marketing planning strategy, Conversion planning strategy, Timing strategy, Income shifting strategy.
Dennis is currently considering investing in municipal bonds that earn 6 percent interests, or in taxable bonds issued by the Coca-Cola Company that pay 8 Percent.
a. If Dennis tax rate is 22 percent, which bond should he choose? Municipal bonds or Taxable Bonds.
b. Which bond should he chooise if his tax rate is 32 percent? Municipal bonds or Taxable bonds.
c. At what tax rate would he be indifferent between the bonds?
Tax rate ?
d. What Strategy is this decision based Upon?
Development planning strategy, Business planning strategy, Decision planning strategy, Marketing planning strategy, Conversion planning strategy, Timing strategy, Income shifting strategy.
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Bonds are referred to as security which earns fixed income during its period. Interest is paid on the face amount of bonds and is paid in fixed intervals. These are issued to raise capital and are usually issued for longer period.
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