A municipal bond yields 4.2 percent. For an investor in a tax bracket of 28 percent, what is the equivalent taxable yield?
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- Assume your in the 28% tax bracket and purchase a municipal bond with yield of 3.10%. What is the taxable equivalent yield for this investment?The current yield on a municipal bons is 6%. What would the equivalent taxable yield of this bond to a taxpayer in a 35% tax bracket? Enter your answer as a decimal not percentage and round your answer to 4 decimal placesWhat is the taxable equivalent yield on a municipal bond with a yield to maturity of 4 percent for an investor in the 28 percent tax bracket?
- Find the equivalent taxable yield of a short-term municipal bond currently offering yields of 4% for tax brackets of (a) zero, (b) 10%, (c) 20%, and (d) 30%.Taxable Equivalent Yield What's the taxable equivalent yield on a municipal bond with a yield to maturity of 10.00 percent for an investor in the 35 percent marginal tax bracket?Solve this
- Answer? ? Financial accountingThe interest rate on a taxable bond is 4%. If your personal tax rate is 25%, what interest rate on a nontaxable bond will make you indifferent between the 2 investments?An investor is comparing the following two bonds: a bond from ABC Corp which pays an interest rate of 9 percent per year and a municipal bond which pays an interest rate of 7.9 percent per year. The investor is in the 15 percent tax bracket. Which bond will give the investor a higher after-tax interest rate and for which reason? Question options: The ABC bond because it pays a 9 percent interest rate, while the municipal bond only pays 7.9 percent. The ABC bond because it pays an equivalent after-tax rate of 10.6 percent, while the municipal bond pays out an equivalent after-tax rate of 9.3 percent. The municipal bond because it pays an equivalent after-tax rate of 9.3 percent, while the ABC bond pays out a 9 percent interest rate. The municipal bond because it pays an equivalent after-tax rate of 7.9 percent, while the ABC bond pays out an equivalent after-tax rate of 7.65 percent. None of the above is correct.
- Q8 What is the taxable equivalent yield on a 4%, tax-exempt municipal bond for a person in the 30% tax bracket?A (general obligation) muni bond pays 7% interest. A Treasury bond pays 6.5% interest. Which bond would you rather own if your marginal tax rate on interest payments is 18%?MULTIPLE CHOICE Calculate the after-tax cost of debt under each of the following cases: (a) the interest rate is 10 percent, and the tax rate is 40 percent; (b) the interest rate is 11 percent, and the tax rate is 50 percent? A. (a)10% and (b)4.5%B. (a)5% and (b)5.5%C. (a)12% and (b)6.5%D. (a)6% and (b)5.5%E. None of the above
