Calculation of after tax return
Course:- Finance Basics
Reference No.:- EM1359102

Assignment Help >> Finance Basics

The Omega Corporation has some excess cash that it would like to invest in marketable securities for a long-term hold. Its vice-president of finance is considering three investments (Omega Corporation is in a 35 percent tax bracket and the tax rate on dividends is 15 percent). Which one should she select based on aftertax return: (a) Treasury bonds at a 9 percent yield; (b) corporate bonds at a 12 percent yield; or (c) preferred stock at a 10 percent yield?

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 60% probability that the firms
The expected return for an investment is 30 percent. If we know the following data about the return distribution of investment, determine the return the investment produce if
If a manager receives part of their salary based on how the portfolios they manage are performing then the manager would want to see his or her portfolio have a high return. D
1) ABC Company has total assets of $795,800. There are 40,505 shares outstanding with a market value of $24 per share. If the net profit margin is 7.8% and the total asset tur
Consider a 6% coupon bond that matures in 20 years.What would be the value of this bond if interest rates fall to 5% the day after it is purchased? If interest rates fell to
e. Calculate the DOL. Consider fixed cost assuming the additional investment of ¥15.10 billion. (Do not round intermediate calculations. Round your answer to 2 decimal pla
Suppose a firm is offered a two-year variable rate monthly pay loan at prime plus 1 percent, with a prime rate of 6.5 percent. What is the effective annual cost of the loan re
The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there