17. An investor purchases one municipal and one corporate bond that pay rates of return of 5.00% and 6.40% respectively. If the investor is in the 15% tax bracket, his after tax rates of return on the municipal and corporate bonds would be respectively

Q: The interest rate on a taxable bond is 4%. If your personal tax rate is 25%, what interest rate on a…

A: Interest rate on a taxable bond = 4% Personal tax rate = 25%

Q: An investor recently purchased a corporate bond that yields 10%. The investor is in the 38% combined…

A: In the above question we need to calculate the bond's after tax yield from the details given.

Q: The Carey State Bank has purchased a bank-qualified municipal bond with a yield of 6%. This bank has…

A: The net after-tax return on the Carey State Bank's bank-qualified municipal bond can be calculated…

Q: 22. An investor in the 30% tax bracket is evaluating two bonds for investment: a corporate bond with…

A: 24The invoice price is the clean price plus the accrued interest.Accrued interest = (Coupon rate /…

Q: the 32% marginal tax bracket, this bond would offer an equivalent taxable yield of O 1) 8.25%. 2)…

A: Municipal yield = 8.75%Tax rate = 32%

Q: A municipal bond's yield to maturity is 7.78%. What is the taxable equivalent corporate bond yield…

A:

Q: You are in the 30% tax bracket (federal & state taxes combined). A corporate bond is yielding 9%.…

A: Municipal bonds are provided by the government and are tax free in nature and these are provided to…

Q: 00 for corporate bonds that have a par value of $10,000 and a coupon rate of 7.4 percent, payable…

A: Bonds are paid coupon interest payments each period and par value is paid on maturity of bond.

Q: An investor is trying to decide between a muni paying 6.20 percent or an equivalent taxable…

A: The objective of this question is to find out the minimum marginal tax rate at which an investor…

Q: A (general obligation) muni bond pays 7% interest. A Treasury bond pays 6.5% interest. Which bond…

A: When deciding between a municipal bond (muni bond) and a Treasury bond based on their interest…

Q: Frosty Corporation pays 11.6% interest on its outstanding bonds.  If its tax rate is 40%, what is…

A: When the corporation pays the interest on bonds, they are eligible to deduct this as an expense in…

Q: Fergie has the choice between investing in a State of New York bond at 10.0 percent and a Surething…

A: "Investment" refers to the action of placing funds or resources into things or endeavors in the…

Q: You are advising a high income client and speaking on the advantages of investing in Municipal…

A: When investing in municipal bonds, one of the advantages is that the interest income is typically…

Q: What’s the taxable equivalent yield on a municipal bond with a yield to maturity of 4.1 percent for…

A: The formula to compute equivalent taxable yield is as follows:

Q: A 10-year corporate bond has an annual coupon of 9 percent ($45 paid semi-annually) and a price of…

A: bonds can offer a range of benefits for investors looking for a stable source of income and a way to…

Q: Taxable Equivalent Yield What's the taxable equivalent yield on a municipal bond with a yield to…

A: Tax-free Yield = 10.00% = 0.10Tax Rate = 35% =  0.35

Q: Calculate the​ after-tax return of​ a(n) 5.625.62 ​percent, 20-year,​ A-rated corporate bond for an…

A: The objective of this question is to calculate the after-tax return of a corporate bond and a…

Q: Curtis invests $450,000 in a city of Athens bond that pays 6 percent interest. Alternatively, Curtis…

A: The implicit tax equals the difference in pre-tax income earned from a similar (same risk) bond.How…

Q: Hui is currently considering investing in municipal bonds that earn 7.50 percent interest, Company…

A: Municipal bonds are tax free that means no taxes are to be paid on the interest income but corporate…

Q: Assume your in the 35% tax bracket and purchased a municipal bond with a yield of 3.60. What is the…

A: Taxable equivalent yield is the return on taxable investment which is equal to the tax-exempt…

Q: A 10-year corporate bond has an annual coupon of 9 percent ($45 paid semi-annually) and a price of…

A: A bond refers to an instrument that is used to raise debt capital for the issuing organization from…

Q: 5) A 10-year municipal bond yields 4.8%. Your marginal tax rate (including state and federal taxes)…

A: After-tax return is the earnings on an investment or asset after accounting for taxes paid on those…

Q: Assume you are in the 35 percent tax bracket and purchase a municipal bond with a yield of 5.75…

A: Municipal bond yield = 5.75%tax rate = 35%Taxable equivalent yield =?

Q: An investor is in the 28% tax bracket. A corporate bond has a before-tax yield of 8%. What is the…

A: Given details are : Before tax yield = 8% Tax rate = 28% = 0.28 We need to compute the equivalent…

Q: Biogen is currently offering a bond with a coupon of 8.55%. The municipality of Boston is currently…

A: Bonds are debt instruments issued by companies or entities like a municipal body or a government…

Q: Assume that Larry's marginal tax rate is 25%. If corporate bonds pay 7.4% interest, what interest…

A: We must compare the after-tax return on the corporate bond to the pre-tax return on the municipal…

Q: Suppose you are a wealthy individual paying 35% tax on income. What is the expected after-tax yield…

A: Yield refers to the returns that an investor earns by holding a fixed-income security till maturity,…

Q: How much explicit tax would Curtis incur on interest earned on the Initech, Incorporated bond? O…

A: A bond is a debt security issued by a company to raise finance for business operations.A bond holder…

Q: Consider an investor who is in a 30% combined federal plus state tax bracket.  If a corporate bond…

A: Tax Rate = t = 30%Yield on Corporate Bond = r = 5%

Q: An investor is in the 28% federal tax bracket, pays an 9% state tax rate and 4% in local income…

A: Municipal bonds are tax-free bonds. issued by governments and the corporate bonds are issued by…

Q: What is the taxable equivalent yield on a municipal bond with a yield to maturity of 4 percent for…

A: In this question we need to compute the taxable equivalent yield on a municipal bond.

Q: Suppose the interest rate on a taxable corporate bond is 4 percent while a municipal, tax exempt…

A: Step 1 Bonds are used for borrowing money by the corporates or state governments or municipalities…

Q: What is the taxable equivalent yield on a 4%, tax-exempt municipal bond for a person in the 30% tax…

A: The tax-equivalent yield is calculates as the tax-exempt yield divided by the difference between…

Q: The current yield on a municipal bons is 6%. What would the equivalent taxable yield of this bond…

A: Yield on municipal bond is tax free. But yield on corporate bond is taxable. Given: Yield on…

Q: An investor is trying to decide between a muni paying 6.20 percent or an equivalent taxable…

A: A municipal bond is a type of bond issued by a state or local government to finance public…

Q: tacey faces a 15% tax rate on interest income. She can buy a $100 face value corporate bond yielding…

A: Municipal bonds are issued by the local government corporation and interest on these bond is tax…

Q: Curtis invests $200,000 in a city of Athens bond that pays 4.00 percent interest. Alternatively,…

A: Please find the calculation of after-tax earnings on the interest on the City of Athens bond in step…

Q: A municipal bond has a yield to maturity of 3.8 percent. What corporate bond yield would make  an…

A: Yield on Municipal Bond should be equal to corporate bond yield * (1-tax rate), for indifference…

Q: Curtis invests $800,000 in a city of Athens bond that pays 5 percent interest. Alternatively, Curtis…

A: Assuming that the Initech bond is also taxable and subject to the same 24% marginal tax rate as the…

Q: Show the tax benefit (per dollar invested) that exists on a municipal bond with a yield of 8U basis…

A: The revenue that the government receives from taxes is used to finance public spendings, such as the…

Cash and Liquid Asset Management

Cash management is the process of controlling cash inflow & cash outflow, managing the cashflows inside the business, and utilizing the cash for business operation at any point in time. A business has to maintain a certain level of cash to meet various financial obligations. Cash management is essential because businesses must utilize the cash to generate maximum profit. Cash management also ensures to maintain maximum liquidity in the business.