What yield must an a- rated municipal bonds carry

Assignment Help Finance Basics
Reference no: EM13302664

Corporate bonds carry an A rating are currently being price to yield 8.62%. For investor in 28% income tax bracket, what yield must an A- rated municipal bonds carry to make this investor indifferent as to the yield difference between the corporate and the municipal bond?

Reference no: EM13302664

Questions Cloud

What must the ph be raised to in order to precipitate : Groundwater in Taupe, Arizona, initially contains 1.8 mg/L of iron(III). What must the pH be raised to in order to precipitate 0.3 mg/L of the iron (T=25°C)
What was the total revenue total expenditures for the state : What was the total revenue total expenditures for the state and local government combined? Was the state local government sector running an overall deficit or surplus in its combined budget? Will borrowing likely be necessary to finish out the cur..
Find the velocity of the block after being hit by the bullet : A bullet of mass 22 g is fired horizontally from a gun with a velocity of 1150 m/s into a wooden block of mass 8.0 kg sitting on a horizontal table
What is the soils unit weight when the degree of saturation : A dry quartz sand has a unit weight of 100 pcf. What is the soil's unit weight when the degree of saturation is 75% if Gs = 2.66
What yield must an a- rated municipal bonds carry : For investor in 28% income tax bracket, what yield must an A- rated municipal bonds carry to make this investor indifferent as to the yield difference between the corporate and the municipal bond?
Product promotions for the populationof cook county : For the first part of this assignment, consider the following case. A marketing firm isevaluating the possibility of using a series of product promotions for the populationof Cook County
Transgene is used in mice to knock out a specific function : When a transgene is used in mice to knock out a specific function, two problems that might occur are the unintended introduction of multiple copies, or abnormal gene expression. In this case, abnormal gene expression is related to which of the follow..
What is the height of the image of the insect : A concave mirror has a radius of curvature of 34.8 cm. What is the height of the image of the insect
How many inches of rain can fall over the entire barge : A barge measures 10 ft (depth) by 35 ft by 120 ft and weighs 100 U.S. tons. The barge floats in fresh water (specific weight = 62.4 lb/ft3) and is evenly filled with 38,000 bushels of corn (60 lb/bushel).

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the bond price

In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5965%. Recognizing that coupons are paid semiannually, calculate the bond's price.

  What is crisp required return

The risk-free rate is 4%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If bi1= 0.5 and bi2 = 0.8, what is Crisp's required return? Round your answer to two decimal places.

  What rate of return should you expect to earn

Based on the period 1926-2008, what rate of return should you expect to earn over the long-term if you are unwilling to bear risk?

  Prepare a cash budget

Make a cash budget for XYZ Company for the first three months of 2004 based on the following data:

  What is the internal rate of return on the project

Under which method(s) above should the company accept the project (applying the acceptance rules)? Explain.

  What is the incremental free cash flow for year one

what is the incremental free cash flow for year one? A)22,305 B)18,875 C)24,220 D)19,985 Please provide explanation for your answers.

  By how much would the roe have changed

Had it cut costs and increased its net income in this amount, by how much would the ROE have changed?

  Computing fv and pv of ordinary annuity

You will receive $2,000 at the end of next 12 years, supposing a 6% discount rate, what is the present value of cash flows?

  What is the cost of common equity

MEC's tax rate is 40%. Two projects are available: Project A has a rate of return of 14%, while Project B's return is 9%. These two projects are equally risky and about as risky as the firm's existing assets.

  Determine parity relationship suggests the futures price

Suppose a futures contract exists on Micromedia stock that expires in two months. Micromedia has a current market price of $200, has a beta of 1.15, a 0% dividend yield, and a standard deviation of .33. The current T-Bill rate is 5% yearly.

  What is the yield to maturity on these bonds

Task Oriental Corporation's bonds make an annual coupon interest payment of 7.35%. The bonds have a par value of $1,000, a current price of $1,130, and mature in 12 years.

  What is its cost of equity in this case

Current the risk-free rate is about 4.5%, and the return on the S&P 500 (the market proxy) is 12.7%. The firm's beta is currently estimated to be 1.65.

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