Hui is currently considering investing in municipal bonds that earn 3.64 percent interest, or in taxable bonds issued by the Coca-Cola Company that pay 5.20 percent. Required: a. If Hui's tax rate is 22 percent, which bond should he choose?
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Hui is currently considering investing in municipal bonds that earn 3.64 percent interest, or in taxable bonds issued by the Coca-Cola Company that pay 5.20 percent.
Required: a. If Hui's tax rate is 22 percent, which bond should he choose?
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- Vandell is a taxpayer in the 25 percent tax bracket. He invests in Otay Mesa Water District Bonds that pay 4.5 percent interest. What interest on a taxable bond would provide the same after-tax return to Vandell? ______%Hui is currently considering investing in municipal bonds that earn 8.55 percent interest, or in taxable bonds issued by the Coca-Cola Company that pay 11.40 percent. Required: If Hui's tax rate is 22 percent, which bond should he choose? Which bond should he choose if his tax rate is 32 percent? At what tax rate would he be indifferent between the bonds? What strategy is this decision based upon?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.
- Hugh has the choice between investing in s City of Heflin bond at 6 percent or investment in Surething, Inc. bond at 9 percent. Assuming that both bonds have the same nontax characteristics and that Hugh has a 40 percent marginal tax rate, in which bond should he invest?Fergie has the choice between investing in a State of New York bond at 5 percent and a Surething Inc. bond at 8 percent. Assuming that both bonds have the same nontax characteristics, and that Fergie has a 30 percent marginal tax rate, in which bond should she invest?Dana intends to invest $66,000 in either a Treasury bond or a corporate bond. The treasury bond yields 5 percent before tax, and the corporate bond yields 6 percent before tax. Assume Dana's federal marginal rate is 24 percent and she itemizes deductions. a-2. How much interest after-tax would Dana earn by investing in the corporate bond? b-1. If she were to move to another state where her marginal state rate would be 10 percent, which of the two options should she choose? b-2. How much interest after-tax would Dana earn by investing in the corporate bond as per requirement b-1?
- Gertie has the choice between investing in a State of New York bond at 5.5 percent and a surething incorporated bond at 8.5 percent. Assuming that both bonds have the same nontax characteristics and that Fergie has a 30 percent marginal tax rate, in which bond should she invest?Hugh has the choice between investing in city of Heflin bond at 77 percent or investing in surething incorporated bond at 10.7 percent. Assuming that both bonds have the same no tax charlatans that Hugh has a 40 percent marginal tax rate, in which bond should he invest?Dana intends to invest $60,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax and the corporate bond yields 6 percent before tax. Required: a-1. Assuming Dana’s federal marginal rate is 24 percent and her marginal state rate is 5 percent, which of the two options should she choose? Assume that Dana itemizes deductions. a-2. How much interest after-tax would Dana earn by investing in the corporate bond? Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. b-1. If she were to move to another state where her marginal state rate would be 10 percent, which of the two options should she choose? Assume that Dana itemizes deductions. b-2. How much interest after-tax would Dana earn by investing in the corporate bond as per requirement b-1? Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.
- Hugh has the choice between investing in a City of Heflin bond at 5.70 percent or investing in a surething incorporated bond at 9.2 percent. Assuming that both bonds have the same no tax characteristics and that Hugh has a 40 percent marginal tax rate, what interest rate does surething incorporated need to offer to make Hugh indifferent between investing in the two bonds?Hugh has the choice between investing in a city bond at 5.70 percent or investing in a surething incorporated bond at 9.25 percent. Assuming that both bonds have the same no tax characteristics and that Hugh has a 40 percent marginal tax rate, what interest rate does surething incorporated need to offer to make Hugh indifferent between investing in the two bonds?Hugh has the choice between investing in a City of Heflin bond at 5.25 percent or investing in a Surething Incorporated bond at 7.75 percent. Assuming that both bonds have the same nontax characteristics and that Hugh has a 40 percent marginal tax rate, what interest rate does Surething Incorporated need to offer to make Hugh indifferent between investing in the two bonds? (Round your answer to 2 decimal places.) Answer: Interest Rate %
