Business, 13.11.2019 05:31 marioagundis0998
An investor is in the 28% tax bracket and lives in a state with no income tax. he is trying to decide which of two bonds to purchase. one is a 6.61% corporate bond that is selling at par. the other is a municipal bond with a 4.63% coupon that is also selling at par. if all other features of these two bonds are comparable, which should the investor select? why? would your answer change if this were an in-state municipal bond and the investor lived in a place with high state income taxes? explain. the investor should select the municipal bond. since the fully taxable equivalent yield of 6.43% is less than the 6.61% return on the corporate bond, the municipal issue is the better buy. the decision very likely would change if this were an "in-state" municipal bond and the investor lived in a state with high income taxes. an "in-state" municipal bond would not only shield the investor from federal taxes but also from high state income taxes. the investor should select the corporate bond. since the fully taxable equivalent yield of 6.43% is less than the 6.61% return on the corporate bond, the corporate issue offers a higher return and is the better buy. the decision very likely would change if this were an "in-state" municipal bond and the investor lived in a state with high income taxes. an "in-state" municipal bond would not only shield the investor from federal taxes but also from high state income taxes. the investor should select the corporate bond. since the fully taxable equivalent yield of 4.63% is less than the 6.61% return on the corporate bond, the corporate issue offers a higher return and is the better buy. the decision very likely would not change if this were an "in-state" municipal bond and the investor lived in a state with high income taxes. an "in-state" municipal bond would not shield the investor from federal taxes or from high state income taxes. the investor should select the municipal bond. since the fully taxable equivalent yield of 4.63% is less than the 6.61% return on the corporate bond, the municipal issue is the better buy. the decision very likely would change if this were an "in-state" municipal bond and the investor lived in a state with high income taxes. an "in-state" municipal bond would not only shield the investor from federal taxes but also from high state income taxes.
Answers: 1
Business, 22.06.2019 11:10
Suppose that the firm cherryblossom has an orchard they are willing to sell today. the net annual returns to the orchard are expected to be $50,000 per year for the next 20 years. at the end of 20 years, it is expected the land will sell for $30,000. calculate the market value of the orchard if the market rate of return on comparable investments is 16%.
Answers: 1
Business, 22.06.2019 19:00
Describe how to write a main idea expressed as a bottom-line statement
Answers: 3
Business, 22.06.2019 19:20
Bcorporation, a merchandising company, reported the following results for october: sales $ 490,000 cost of goods sold (all variable) $ 169,700 total variable selling expense $ 24,200 total fixed selling expense $ 21,700 total variable administrative expense $ 13,200 total fixed administrative expense $ 33,600 the contribution margin for october is:
Answers: 1
An investor is in the 28% tax bracket and lives in a state with no income tax. he is trying to decid...
Mathematics, 28.09.2020 17:01
History, 28.09.2020 17:01
Business, 28.09.2020 17:01
World Languages, 28.09.2020 17:01
Mathematics, 28.09.2020 17:01
Chemistry, 28.09.2020 17:01
Social Studies, 28.09.2020 17:01
Social Studies, 28.09.2020 17:01
Chemistry, 28.09.2020 17:01