Federal income tax bracket

Assignment Help Financial Management
Reference no: EM13928205

You are in the 28 percent federal income tax bracket. A corporate bond offers you a 6.8 percent while a tax-exempt bond with the same credit rating and term to maturity offers 4.1 percent. On the basis of taxation, which bond should be preferred? Explain your answer.

Reference no: EM13928205

Questions Cloud

Statement about the organizational culture inventory : When a manager monitors the progress of an affirmative action program to advance minorities within the corporation, reviews progress on changes in employee attitudes, calls a special meeting to discuss problems, and makes appropriate adjustments i..
Determine the insurance premiums paid : The Jones Company debits prepaid insurance for the insurance premiums paid. During the year insurance expense is computed for interim periods and insurance expense is debited and prepaid insurance is credited. Information for the year ended Dec 31, 2..
Why these tools are appropriate for your target population : Explain why these tools are appropriate for your target population. Explain potential ethical issues you need to consider in disseminating information and communicating a message to your population
Why do so many organizations purchase insurance policies : This is due to the insurance company's administrative costs and profits. In spite of this fact, why do so many individuals and organizations purchase insurance policies?
Federal income tax bracket : You are in the 28 percent federal income tax bracket. A corporate bond offers you a 6.8 percent while a tax-exempt bond with the same credit rating and term to maturity offers 4.1 percent. On the basis of taxation, which bond should be preferred? Exp..
Long-term if you are unwilling to bear risk : Based on the period 1926-2011, what rate of return should you expect to earn over the long-term if you are unwilling to bear risk?
Objective of financial reporting : 1. Which of the following is NOT normally an objective of financial reporting?
Forecast of demand-find the break-even quantity : A producer of felt-tip pens has received a forecast of demand of 34,000 pens for the coming month from its marketing department. Fixed costs of $30,000 per month are allocated to the felt-tip operation, and variable costs are 36 cents per pen. Find t..
What is the geometric return for this stock : A stock has had returns of 11 percent, -8 percent, 6 percent, 21 percent, 24 percent, and 16 percent over the last six years, respectively. What is the geometric return for this stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Hedge their euro and dollar exposure

On January 2d, 2014, Microsoft expects to ship 1,000,000 new X-Boxes from its US plant, which it will sell through EU dealers on 270-day terms at 250 Euro each. So Microsoft will receive payment from its dealers on September 28th, 2014.

  Issued preferred stock with stated annual dividend

Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 11% of its $100 par value. Preferred stock of this type currently yields 8%. Assume dividends are paid annually. What is the value of Rolen's preferred stock?

  Afford the payment regardless of the term length

The cost of the truck is $18,000 and he is approved for an 8% loan but can choose to finance the loan for either 48 or 60 months. What will be the additional cost if he chooses the 60 month term instead of 48 months? You can assume that he can afford..

  Treasury offers to sell

Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,000. What interest rate would you earn if you bought this bond at the offer pr..

  Volatile business cycles

Suppose a firm finds itself as the target of a possible hostile takeover. An outside investor has acquired a major stake of shares and is threatening to exert influence on the broad. If you were to look at a firm's distribution of cash to investors o..

  About the efficiency analysis

(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits /sales) of 25 percent and sales of $9.5 million last year. 74 percent of the firm’s sales are on credit, and the remainder is cash sales. Brenmar’s current asset..

  What is the standard deviation of these returns

The common stock of Air United had annual returns of 13.7 percent, 4.8 percent, -6.7 percent, and 27.9 percent over the last four years, respectively. What is the standard deviation of these returns?

  Calculate the payback period net present value npv and

step 1 ratio analysis1.this assessment task involves you calculating a range of ratios for your firm and using these

  Calculating financial ratios

Calculating Financial Ratios

  Investments required in order to positive operating ratio

An insurance company’s projected loss ratio is 79 percent, and its loss adjustment expense ratio is 13.3 percent. It estimates that commission payments and dividends to policyholders will add another 17 percent. What is the minimum yield on investmen..

  Initial cost probability net revenue probability

A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate projects. This project has an uncertain initial cost and net revenue as below. A. Joint probability distribution for cost and net revenue B.

  Should you take the lump sum or the annuity

You just won the florida lottery. You have the choice of 24000000 today or a 20 year annuity 2280000, with the first payment coming one year from today. If you want an annual return of 7.5 percent, should you take the lump sum or the annuity? Explain..

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