You can invest in taxable bonds that are paying a yield of 9.50 percent or a municipal bond paying a yield of 7.75 percent. If your marginal tax rate is 21 percent,which security bond should you buy?
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You can invest in taxable bonds that are paying a yield of 9.50 percent
or a municipal bond paying a yield of 7.75 percent. If your marginal
tax rate is 21 percent,which security bond should you buy?
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- 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?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 has a coupon rate of 5.83 percent and ytm of 5.53 percent. If an investor has a marginal tax rate of 28 percent. What is the equivalent pretax yield on a taxable bond?
- 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?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 ofSuppose 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)
- 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)A bond issued by the New York state is priced to yield 6.30 % . If you are in the 25 % tax bracket this bond would provide you with an equivalent taxable yield ofA 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.)
- An investor is comparing the following two bonds: a bond from ABC Corp which pays an interest rate of 9 percent per year and a municipal bond which pays an interest rate of 7.9 percent per year. The investor is in the 22 percent tax bracket. Which bond will give the investor a higher after-tax interest rate and for which reason? a. The ABC bond because it pays a 9 percent interest rate, while the municipal bond only pays 7.9 percent. b. None of these is correct. c. The ABC bond because it pays an equivalent after-tax rate of 11.5 percent, while the municipal bond pays out an equivalent after-tax rate of 10.1 percent. d. The municipal bond because it pays an equivalent after-tax rate of 7.9 percent, while the ABC bond pays out an after-tax 7.02 percent interest rate. e. The municipal bond because it pays an equivalent after-tax rate of 7.9 percent, while the ABC bond pays out an equivalent after-tax rate of 2.0 percent.If your primary goal is current yield, which one of these bonds is the wiser investment? Bond A: $1,000 corporate bond that pays 6 percent and has a current market value of $700; or Bond B: $1,000 corporate bond that pays 7.25 percent and has a current market value of $800?Find the equivalent taxable yield of a short-term municipal bond currently offering yields of 4% for tax brackets of (a) zero, (b) 10%, (c) 20%, and (d) 30%.