Suppose that short-term municipal bonds currently offer yields of 4%, while comparable taxable bonds pay 5%. Required: Which gives you the higher after-tax yield if your combined tax bracket is: Higher After-Tax Yield a. Zero Municipal bond b. 10% Taxable bond c. 20% Municipal bond d. 30% Neither

Q: None

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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%

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Q: bond

A: 1) To calculate which bond is more beneficial we have to calculate the YTM. Formula for YTM is: YTM…

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A: Yield to maturity = 5.53%  Marginal Tax = 28%

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A: Future value of bonds payable = $1000Stated rate = 5%Market rate = 4%

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A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: None

A: To find the tax-equivalent yield for the municipal bond, follow these steps:Calculate the Bond's…

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A: Please refer to the image below.

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A: Yield to purchaser = r = 13% Tax rate = t = 34%

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A: Annual effective interest rate is interest rate considering after the effect of compounding.

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Q: A municipal bond has a YTM of 5.19 percent while the YTM of a comparable taxable bond is 7.78…

A: Municipal bond yield (MY) = 0.0519Corporate bond yield (CY) = 0.0778Tax rate = ?Municipal bonds are…