问题161分One more assumption to make for this question. Now assume that just before issuance ofthe bonds by these two entities the Congress passes a law making municipal bonds tax-free.Under these assumptions, to be able to borrow $120,000,000, the Treasury has to issue abond with a face value ofdollars and the city government has to issue abond with a face value ofdollars.The after-tax rate of return from the Treasury bond for the investors like you and me will bepercent and the after-tax rate of return from the municipal bond will bepercent.After one year when the bonds mature, the Treasury will payinterest to the lenders. The city government will payto the lenders.dollars indollars in interest

To complete this problem, we need to determine the required face value of the bonds and the…

Answered: 问题16 1分 One more assumption to make for…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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It is the policy of the corporation to maintain current ratio of 1.5 to 1.0. Its current liabilities are 400,000 and present current ratio is 2 to 1. How much is the maximum level of new short term loans it can secure without violating the policy? a• 400,000 b• 533,333 c• 200,000 d• 300,000
Question 9 Mr. Dover is purchasing a government strip bond with a face value of $5,000 and 30 years until maturity If the price of the bond is $924.06, what is its nominal yield? Note: Please make sure your answer are in porcentage form and are Accurate to 3 decimal places.
Ef 505.
QUESTION FIVE You have enough money to buy 100, $1,000, 5 year, 8% government bonds that pay interest semi-annually for a price of $954 per bond. You can get 8.5% a year if you deposit your funds for 5 years with a major bank. What should you do? What is the YTM of the bond?
A business projects get the following flows of cash: Year flows (in Thousands of colones) 1 ¢750.00 two ¢800.00 3 ¢700.00 4 ¢1,000.00 5 ¢975.00 6 ¢1,500.00 7 ¢2,000.00 Yes the rate of discount it is of twenty%, which it is the worth Present of these flows?
QUESTION TWO A large Bahraini company issued BD10,000, 10%, 10-year bonds that paid interest semi- annually. You bought the bonds for BD9,000 per bond. What was your yield to maturity? (Be careful.) What is the company's after tax cost of debt if the corporate tax rate is 30%?
Question 3- Taxable Equivalent Yield Jack & Jill are a young married couple residing in Connecticut. Their Federal marginal tax rate is 22.0%; their Connecticut state marginal tax rate is 5.5%. A few days ago, University of Connecticut offered a 20-year bond issue with an annual coupon of 3.23%. Jack & Jill intend to buy the bond at par value and hold to maturity. [BTW...UCONN bonds are Connecticut G.O.s!] A. Ignoring state income tax, calculate Jack & Jill's "taxable equivalent yield" on the UCONN bond. Show all calculations. B. Including both Federal & Connecticut income taxes, calculate taxable equivalent yield. (HINT: see Equation 10.2, page 405 of your textbook.) Show all calculations.
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Required: Find the equivalent taxable yield of the municipal bond for tax brackets of zero, 10%, 20%, and 30%, if it offers a yield of 4.60%. (Round your answers to 2 decimal places.) Equivalent Taxable Yield a. Zero % b. 10% % c. 20% % d. 30% % +
1. A bond issued by the Irbid Municipal priced to yield 7.80%. If you are in the 15% tax bracket this bond would provide you with an equivalent taxable yield of 8.41% 7.80% 9.17% 8.99%
Question 1: Part A. The current 10 year treasury note is approaching the important threshold of: a) 2.75% b) 2.95% c) 3.25% d) 2.0% Part B. In a real estate investment, you may want to obtain a mortgage. In so doing, which year would you expect to see the highest amount of principal pay-down (in a payment mix of principal and interest)? a) year 15 b) year 20 c) year 10 d) year 25Part C. In a Fast Market, you would rather sell a stock using a: a) Market Order b) Market On Close Order c) Limit Order d) Market On Open OrderPart D. Given that equity markets are asymmetric in their respective moves, markets are said to take________________________ a) the slow grind higher into perpetuity b) the stairs down and the elevator up c) the stairs up and your mom home d) the stairs up and the elevator down Part E. It is said that traders have come to employ the use of technical analysis potentially for all of the following reasons except:…

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