What's the taxable equivalent yield on a municipal bond with a yield to maturity of 3.8 percent for an investor in the 33 percent marginal tax bracket?
Q: Corporate bonds issued by Johnson Corporation currently yield 8%. Municipal bonds of equal risk…
A: Current yield on Corporate bonds = 8% Current yield on Municipal bonds = 6% Formula: Corporate Bond…
Q: An investor recently purchased a corporate bond that yields 9%. The investor is in the 36% combined…
A: Before tax yield = 9.00% Tax rate = 36% After Tax yield = Before tax yield * (1- Tax rate)
Q: Municipal bonds are yielding 4.4 percent if they are insured and 4.7 percent if they are uninsured.…
A: Bonds are the debt security which is offered or issued by the corporates or the governments to…
Q: Suppose the state of Indiana issued a tax-exempt bond to pay for student fees in its universities.…
A: The tax-equivalent yield, also known as the After-tax yield, is used to establish if an investment…
Q: A corporate bond pays 9.75% interest. You are in the 29 percent tax bracket. What is your after-tax…
A: In this question we need to compute the after tax yield on the bond. Yield on bond = 9.75% Tax rate…
Q: Find the equivalent taxable yield of a short-term municipal bond currently offering yields of 4% for…
A: With the given information, we can calculate the equivalent taxable yield using the steps below:
Q: An investor recently purchased a corporate bond that yields 10%. The investor is in the 38% combined…
A: In the above question we need to calculate the bond's after tax yield from the details given.
Q: Short-term municipal bonds currently offer yields of 4%, while comparable taxable bonds pay 5%.…
A: With the given information, we can compare the yields as follows:
Q: A municipal bond you are considering as an investment currently pays a yield of 6.76 percent. a.…
A: The tax-equivalent yield is the rate of return that a taxable bond must achieve in order to match…
Q: A bond issued by the New York state is priced to yield 6.30 % . If you are in the 25 % tax bracket…
A: Bonds are a kind of debt financial instrument which is a fixed-income investment vehicle that…
Q: Frosty Corporation pays 11.6% interest on its outstanding bonds. If its tax rate is 40%, what is…
A: When the corporation pays the interest on bonds, they are eligible to deduct this as an expense in…
Q: What’s the taxable equivalent yield on a municipal bond with a yield to maturity of 4.1 percent for…
A: The formula to compute equivalent taxable yield is as follows:
Q: Kelly Phillips, an investor who resides in Livingston NJ, has a marginal tax rate of 28%. If a NJ…
A: Yield to maturity = 5.53% Marginal Tax = 28%
Q: Suppose an investor is considering a corporate bond with a 7.17% before-tax yield and a municipal…
A: For indifference, both bond should be equal after tax
Q: What is the yield to maturity on Fox Inc.'s bonds if its after-tax cost of debt is 9% and its tax…
A: After Tax Cost of Debt is calculated as Yield to maturity minus tax shield.
Q: If the municipal bond rate is 6% and the corporate bond rate is 8%, what is the marginal tax rate,…
A: The taxable equivalent yield is 8% in this scenario whereas tax free yield is 6%. We need to find…
Q: An LGU bond offers a yield of 8.5%. What rate should a corporation offer on its bond so investors…
A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…
Q: Assume a municipal bond has a yield of 5.75% and corporate bond of comparable maturity and credit…
A: After tax yield on any investment is the total rate of return that is generated after accounting for…
Q: An investor is in the 28% tax bracket. A corporate bond has a before-tax yield of 8%. What is the…
A: Given details are : Before tax yield = 8% Tax rate = 28% = 0.28 We need to compute the equivalent…
Q: The after-tax cost of debt using the bond's yield to maturity (YTM) is %. (Round to two decimal…
A: Cost of Debt: It represents the cost of raising debt capital from the debt holders. The debt…
Q: A Corporation believes that it can sell long term-bonds with an 8% coupon rate, although the…
A: Corporate bond kind of debt issued by profit-generating organizations. These bonds are risky, unlike…
Q: Terrier Company is in a 50 percent tax bracket and has a bond outstanding that yields 12 percent to…
A: A debt is a security instrument that I s issued by the organization to raise the funds from the…
Q: An investor is comparing the following two bonds: a bond from ABC Corp which pays an interest rate…
A: Municipal bonds are tax free interest bonds. Therefore, no tax will be levied on interest…
Q: Assume a municipal bond has a yield of 5.75% and corporate bond of comparable maturity and credit…
A: After tax Yield on Municipal Bond = Before Tax Yield on Municipal Bond After tax Yield on Municipal…
Q: A bond issued by the Irbid Municipal is priced to yield 7.80%. If you are in the 15% tax bracket his…
A: Tax Equivalent Yield = Tax free municipal yield / (1 -tax rate)
Q: The coupon rate on a tax-exempt bond is 5.6%, and the rate on a taxable bond is 8%. Both bonds sell…
A: Tax-exempt bond is 5.6%. By using the formula of Equivalent taxable yield, The formula of…
Q: ake Baldwin is looking for a fixed-income investment. He is considering two bond issues: A Treasury…
A: We need to compute tax adjusted yield for both the bonds
Q: What is the taxable equivalent yield on a municipal bond with a yield to maturity of 4 percent for…
A: In this question we need to compute the taxable equivalent yield on a municipal bond.
Q: If a 5 yr. AA- General Dynamics note is yielding a 35% tax bracket investor 7.56125% while a…
A: Tax equivalent yield is used to determine the yield from a municipal bond or a note.
Q: A state issued muni bond offered at a coupon rate of 4% is preferred over a junk bond of 6% when a…
A: Municipal securities, sometimes known as "muni bond," are bonds issued by states, cities, counties,…
Q: A municipal bond has a yield to maturity of 3.8 percent. What corporate bond yield would make an…
A: Yield on Municipal Bond should be equal to corporate bond yield * (1-tax rate), for indifference…
Q: You purchase a tax-free municipal bond paying an annual rate of 6 percent. Find the before-tax rate…
A: Before tax rate = annual rate / (1-tax rate)
Q: Outstanding debt of Home Depot trades with a yield to maturity of 8%. The tax rate of Home Depot is…
A: Cost of debt: The minimum rate of return that a debt holder expects to earn from the debt…
Q: Assume you are in the 35 percent tax bracket and purchase a 3.60 percent municipal bond. Use the…
A: Formulas: Taxable equivalent yield = Municipal bond interest rate / (1- Tax rate)
Q: What is the tax exempt equivalent yleld on a 9% bond yleld given a marginal tax rate of 23%?…
A: Formula: Tax exempt equivalent yield = Bond yield x ( 100 - Marginal Tax rate )
Q: A Corporation believe that it can sell long term-bonds with an 8% coupon rate, although the…
A: Coupon rate = 8% Effective rate = 10% Tax rate = 35%
Q: 1. A bond issued by the Irbid Municipal is priced to yield 7.80%. If you are in the 15% tax bracket…
A: Given, Tax rate = 15% Yield = 7.8%
Q: A 7-year municipal bond with a face value of $1,000 earns annual income of $480. Your marginal tax…
A: Given: Annual income = $480 Tax rate = 36%
Q: Suppose you invest in a municipal bond that pays a yield of 9%. If your marginal tax is 17%, what is…
A: The tax-equivalent yield is the rate of return necessary for a taxable bond to equal the rate of…
What's the taxable equivalent yield on a municipal bond with a yield to maturity of 3.8 percent for an investor in the 33 percent marginal tax bracket?
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- Suppose you invest in a municipal bond that pays a yield of 9%. If your marginal tax is 17%, what is the equivalent yield on the taxable bond?Taxable Equivalent Yield What's the taxable equivalent yield on a municipal bond with a yield to maturity of 10.00 percent for an investor in the 35 percent marginal tax bracket?Suppose you invest in a municipal bond that pays a yield of 9%. If your marginal tax is 29%, what is the equivalent yield on the taxable bond? (write your answer in percentage and round it to 2 decimal places)
- you invest in a municipal bond that pays a yield of 10%. If your marginal tax is 26%, what is the equIvalent yield on the taxable bond? (write your answer in percentage and round it to 2 decimal places)A municipal bond carries a coupon of 6.75% and is trading at par. What is the equivalent taxable yield to a taxpayer in a combined federal plus state 34% tax bracket?Suppose you invest in a municipal bond that pays a yield of 4. If your marginal tax is 17%, what is the equvalent yield on the taxable bond? (write your answer in percentage and round it to 2 decimal places)
- Calculate the after-tax return of a(n) 5.625.62 percent, 20-year, A-rated corporate bond for an investor in the 1515 percent marginal tax bracket. Compare this yield to a(n) 3.683.68 percent, 20-year, A-rated, tax-exempt municipal bond, and explain which alternative is better. Repeat the calculations and comparison for an investor in the 3535 percent marginal tax bracket.The current yield on a municipal bons is 6%. What would the equivalent taxable yield of this bond to a taxpayer in a 35% tax bracket? Enter your answer as a decimal not percentage and round your answer to 4 decimal placesA municipal bond carries a coupon rate of 4.25% and is trading at par. What would be the equivalent taxable yield of this bond to a taxpayer in a 35% combined tax bracket? (Round your answer to 2 decimal places.)
- You can invest in taxable bonds that are paying a yield of 9.7 percent or a municipal bond paying a yield of 7.95 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16))b. Which security bond should you buy?A bond issued by the Irbid Municipal is priced to yield 7.80%. If you are in the 15% tax bracket his bond would provide you with an equivalent taxable yield ofAssume you are in the 35 percent tax bracket and purchase a 3.60 percent municipal bond. Use the formula presented in this chapter to calculate the taxable equivalent yield for this investment.