what is the equIvalent yield on the taxable bond?

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: You can invest in taxable bonds that are paying a yield of 9.50 percent or a municipal bond paying a…

A: A security bond is a legally enforceable promise to pay the government if you or your employee…

Q: certain government-issued 10-year bond pays an interest at 16 percent every three months. If the…

A: A bond's present value (PV) is the current value of all future cash flows from the bond, discounted…

Q: Assume that you purchased a $10,000 corporate bond. The interest rate is 7.00 percent. What is the…

A: Bond purchased amount (FV) = $10,000Interest rate = 7.00%

Q: An investor purchases a 30-year U.S. government bond for $1,020. The bond's coupon rate is 9…

A: Given information: Present value of bond is $1,020 Par value of bond is $1,000 Coupon rate is 9%…

Q: Suppose the state of Indiana issued a tax-exempt bond to pay for student fees in its universities.…

A: The tax-equivalent yield, also known as the After-tax yield, is used to establish if an investment…

Q: If the annual interest rate is 9% and inflation rate is 5%. What does the tax rate have to be in…

A: Real rate of return=1+annual interest rate1+Inflation rate-1=1.091.05-1=3.8%

Q: Suppose you invest in a municipal bond that pays a yield of 149%. If your marginal tax is 15%, what…

A: A municipal bond is a government debt security issued to raise long-term debt funds. The yield…

Q: A Treasury bond that you own at the beginning of the year is worth $1,020. During the year, it pays…

A: Dollar return = Ending value + interest - beginning value Dollar return = $1,030 + 32 - $1,020…

Q: An investor purchases a 30-year U.S. municipal bond for $840. The bond’s coupon rate is 10 percent…

A: We know all the cash flows associated with the bond along with the timing. We need to find the…

Q: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…

A:

Q: Assume your in the 28% tax bracket and purchase a municipal bond with yield of 3.10%. What is the…

A: Tax Rate = 28% or 0.28Tax-Exempt Yield (Municipal Bond Yield) = 3.10% or 0.0310 Calculation of…

Q: If a taxpayer's marginal tax rate is 33 percent, what is the after-tax yield on a corporate bond…

A: Marginal tax rate = 33% Before tax interest on corporate bond = 5%

Q: A municipal bond you are considering as an investment currently pays a yield of 6.76 percent.   a.…

A: The tax-equivalent yield is the rate of return that a taxable bond must achieve in order to match…

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 bond issued by the New York state is priced to yield 6.30 % . If you are in the 25 % tax bracket…

A: Bonds are a kind of debt financial instrument which is a fixed-income investment vehicle that…

Q: A Treasury bond that you own at the beginning of the year is worth $1,100. During the year, it pays…

A: Treasury Bond: Beginning value (purchase price)= 1100 Ending value (Sale price)= 1110 Interest…

Q: A corporation issues a bond that promises to pay you monthly coupons in the amount of $ 77.5 per…

A: Bond price refers to the market value at which a bond is traded. It represents the present value of…

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: b) You can invest in taxable bonds that are paying a yield of 9.50% or a municipal bond paying a…

A: A security bond is a legally enforceable promise to pay the government if you or your employee…

Q: You can invest in taxable bonds that are paying a yield of 9.4 percent or a municipal bond paying a…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: Which of the following investments has the highest annual percentage yield (APY)? (Assume that all…

A: Bank A's nominal rate = 8% compounded quarterly Bank B's nominal rate = 8% compounded monthly Bank…

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: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…

A: Bonds are obligation securities issued by governments, districts, or enterprises to raise capital…

Q: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…

A:

Q: You plan to invest in bonds that pay 3.25%, compounded annually. If you invest $10,000 today, how…

A: Given: Interest rate is 3.25% Present value $10,000 Future value = $30,000 Number of years =?

Q: You intend to purchase a 9-year, $1,000 face value bond that pays interest of $65 every 6 months. If…

A: A bond refers to an instrument issued by companies to raise debt capital from their investors. A…

Q: What would you pay for a $205,000 debenture bond that matures in 15 years and pays $10,250 a year in…

A: Issue price of the bonds = Present value of principal + Present value of interest payments where,…

Q: What would you pay for a $195,000 debenture bond that matures in 15 years and pays $9,750 a year in…

A: Introduction: Debenture bonds are issued by the organization to borrow money for its business…

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: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…

A: Here, Particulars Values Par value  $10,000.00 Present value (PV)  $9,500.00 Coupon rate…

Q: 1. A municipal bond has a coupon rate of 5.83 percent and a YTM of 5.53 percent. If an investor has…

A: The yield at which a pretax bond is equal to a tax-free bond is equivalent to a pretax yield. This…

Q: DBF borrows $3.29B by issuing 12-year bonds. ECB's cost of debt is 6.07%, so it will need to pay…

A: Interest tax shield is the advantage which a firm receives for having debt component in its capital…

Q: Suppose a U.S. government bond pays $2,155.40 in 5 years at 6% interest. Calculate the present value…

A: Future value of bond (FV) = $ 2,155.40 Period (N) = 5 Years Interest rate (R) = 6%

Q: Calculate the DTI ratio (as a percent) for a borrower who has a gross monthly income of $5,330 and…

A: DTI ratio compares a person's or a household's total debt payments to their gross income. This is…

Q: Ocean Co. just paid a dividend of $2 per share out of earnings of $4 per share. If the book value…

A: Given information: Dividend (D)=$2 Earnings per share (EPS)=$4 Share price (P)=$25

Q: Assume that an individual owns a bond that they purchased for $100,000. The bond has a 10% coupon.…

A: Bonds- A bond is a fixed-income tool that represents a loan made by a shareholder to a borrower…

Q: Suppose that your marginal tax rate is 20%. Your after-tax return from holding (to maturity) a…

A: The following information has been provided,Marginal tax rate = 20%Yield to maturity (YTM) = 10%

Q: ake Baldwin is looking for a fixed-income investment. He is considering two bond issues: A Treasury…

A: We need to compute tax adjusted yield for both the bonds

Q: Suppose a state of California bond will pay $1,000 eight years from now. If the going interest rate…

A: Maturity price (FV) = $ 1000 Period (t) = 8  Years Annual interest rate (r) = 6.4%

Q: A municipal bond has a coupon rate of 5.83 percent and ytm of 5.53 percent.  If an investor has a…

A: Solution:- Equivalent pretax yield on a taxable bond means the yield on taxable bond at which its…

Q: A one-year U.S. Treasury bond and a one-year corporation bond both promise to pay $11,934 next year.…

A: A bond is a debt instrument that is used for raising capital by organizations for their operations.…

Q: You pay $5600 for a municipal bond. When it matures after 15 years, you receive $11,000 The total…

A: Pay for Municipal Bond  $ 5600 Matures After 15 Years. We received $11000 Total Return calculated as…

Q: asury with a yield of 5.99% -state municipal bond with a yield of 4.46% in the 32% federal tax…

A: Municipal bonds are used by government to raise money from market and these bonds are tax exempted…

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: mpare bond a is giving you 10 % return and municipal bond b is giving you 8 % return . your marginal…

A: Municipal bonds are tax free bond and corporate bonds are not tax free and so can compare the after…