1. What is is the taxable equivalent yield (TEY) on the following muni bonds, given a 30% tax rat Price Semi-annual coupon rate 104.25 Price 6% Annual coupon rate 100 Face value Face value 10 Maturity Maturity TEY TEY 100 Price 5% Semi-annual coupor 100 Face value 7 Maturity TEY

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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1. What is is the taxable equivalent yield (TEY) on the following muni bonds, given a 30% tax rate?
Price
Semi-annual coupon rate
104.25 Price
6% Annual coupon rate
100 Face value
Face value
Maturity
10 Maturity
TEY
TEY
100 Price
5% Semi-annual coupon rate
100 Face value
7
Maturity
TEY
900 Price
4% Zero
1000 Face
3
coupon
value
Maturity
TEY
896.65
1000
5
Transcribed Image Text:1. What is is the taxable equivalent yield (TEY) on the following muni bonds, given a 30% tax rate? Price Semi-annual coupon rate 104.25 Price 6% Annual coupon rate 100 Face value Face value Maturity 10 Maturity TEY TEY 100 Price 5% Semi-annual coupon rate 100 Face value 7 Maturity TEY 900 Price 4% Zero 1000 Face 3 coupon value Maturity TEY 896.65 1000 5
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