A municipal-non-taxable-bond has yield to maturity

Assignment Help Financial Management
Reference no: EM131324791

A municipal, non-taxable, bond has a yield to maturity of 5.6 percent. A corporate, taxable, bond with comparable risk has a yield to maturity of 7.8 percent. An investor is indifferent between these two bonds. What is the marginal tax rate of this investor?

Reference no: EM131324791

Questions Cloud

Rate of return on investments of this risk : A company just paid an annual dividend of $0.82 per share, and this dividend is expected to remain constant in the future. What is one share worth today if you require a 12% rate of return on investments of this risk?
How does it affect a persons future social competence : What is attachment in infancy, and how does it affect a person's future social competence?What is the difference in emotional expressions between newborns and older infants?Why is it important for children to learn how to utilize social referencing?
Multiple steps in gene expression : You are studying which of the multiple steps in gene expression you could tweak in order to produce a normal version of the huntingtin protein despite having the allele with the mutation. Which step in gene expression would be the most promising?
Evaluate effects of the proposed price cut on total profits : If average variable costs are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits
A municipal-non-taxable-bond has yield to maturity : A municipal, non-taxable, bond has a yield to maturity of 5.6 percent. A corporate, taxable, bond with comparable risk has a yield to maturity of 7.8 percent. An investor is indifferent between these two bonds. What is the marginal tax rate of this i..
Why did the movement eventually lose momentum : Address the following questions in your essay: What successes were achieved? Why did the movement eventually lose momentum
Discuss about the conceptualization and operationalization : Discuss about the Conceptualization and Operationalization.Include Concepts,Indicators ,Conceptualization,Operationalization,Independent and Dependent Variables,Primary and Secondary Sources,Additional Seminar Information.
Is the industry in long-run equilibrium at this price : If the prevailing market price is $17 per unit, how many units will be produced and sold? What are profits per unit? What are total profits?
What is required rate of return on stock with beta : Assume that the risk-free rate is 7% and the required return on the market is 10%. What is the required rate of return on a stock with a beta of 0.6?

Reviews

Write a Review

Financial Management Questions & Answers

  Determine earnings after taxes under this financing plan

Lear Inc. has $950,000 in current assets, $425,000 of which are considered permanent current assets. In addition, the firm has $750,000 invested in fixed assets. Lear wishes to finance all fixed assets and half of its permanent current assets with lo..

  Proforma income statement for corporation

You have developed the following proforma income statement for your corporation: Sales $45800000 Variable costs (22755000) Revenue before fixed costs $23045000 Fixed costs (9144000) EBIT $13901000 interest expense (1294000) Earnings before taxes $126..

  What is the expected total rate of return over 2 years

Write down the formula for the total rate of return over 2 years. -  What is the expected total rate of return over 2 years?

  Thinking about purchasing a new clam maker

Honey Bee is thinking about purchasing a new clam maker for $14,000. The expected net cash flows resulting from the digger are $9,000 in year 1, $7,000 in the 2nd year, $5,000 in the 3rd year, and $3,000 in the 4th year. Assuming that the cost of cap..

  Find amount of principal paid-interest paid-ending balance

You borrow a 20 year $218,000 mortgage loan at annual interest rate of 3.5%. What is the monthly mortgage payment ? Find the amount of principal paid , interest paid , and ending balance for the first month. Find the amount of principal paid,interest..

  Compute the present value of a one-time payment

Compute the present value of a one-time payment of $1,000 paid in four years using the following discount rates: 2.0% in year 1, 2.25% in year 2, 4% in year 3, and 4.5% in year 4. Present Value: $

  Double taxation on profits

Double taxation on profits is:

  What is the reward-to-volatility ratio for the equity fund

You manage an equity fund with an expected risk premium of 13.2% and a standard deviation of 46%. The rate on Treasury bills is 4.6%. Your client chooses to invest $105,000 of her portfolio in your equity fund and $45,000 in a T-bill money market fun..

  Planning to issue bonds with warrants

GCC Corporation is planning to issue bonds with warrants. Which of the following events/actions would decrease the chance that GCC warrants will be exercised, other things held constant?

  What is the cash flow to the floater class when libor

A F/IF security is created with $20,000,000 in principal and a WAC of 7%. 40% of the principal is allocated to the floater class and the remainder is allocated to the inverse floater class. The floater class will receive LIBOR+50bp. What is the cash ..

  Find the time weighted and dollar weighted rates of return

An investment manager had a fund of 100,000 at the start of the year. on Feb 1, the fund had dropped to 98,000 and a withdrawal of 10,000 was made. On Sep. 1, the fund balance was 100,000 and a new deposit of 10,000 was made. At year end, the account..

  Calculate families share of earnings

Juan, married and a father of 4 is 45 and expects to work until 65. he earns 70,000$ a year and expects an increase annually of 5%. Juan expects inflation to be 4% over his working life. His personal consumption is earl to 10% after tax earning and h..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd