Assume you are in the 32 percent tax bracket and purchase a 3.26 percent, tax-exempt municipal bond. Calculate the taxable equivalent yield for this investment using the formula: Taxable equivalent yield = Tax-exempt return (1 - Your tax rate) Note: Enter your answer as a percent rounded to 2 decimal places. Taxable equivalent yield %

Assume you are in the 32 percent tax bracket and purchase a 3.26 percent, tax-exempt municipal bond. Calculate the taxable equivalent yield for this investment using the formula: Taxable equivalent yield = Tax-exempt return (1 - Your tax rate) Note: Enter your answer as a percent rounded to 2 decimal places. Taxable equivalent yield %

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

See similar textbooks

Similar questions

Assume you are in the 35 percent tax bracket and purchase a municipal bond with a yield of 5.75 percent. Use the formula presented in chapter 11 of your textbook to calculate the taxable equivalent yield for this investment. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Taxable equivalent yield %
Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, calculate the TAX SHIELD. Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 a) 101.36 b) 46.37 c) 158.33 d) 82.85
Comparing Taxable and Tax-Free Yields. With a 28 percent marginal tax rate, would a tax-free yield of 7 percent or a taxable yield of 9.5 percent give you a better return on your savings? Why?
A taxable investment produced interest earnings of $2,800. A person in a 26 percent tax bracket would have after-tax earnings of: (Round your answer to the nearest whole number.) Multiple Choice $2,800. $728. $1,347. $2,072. $2,285.
7. Comparing Taxable and Tax-Free Yields. With a 28 percent marginal tax rate, would a tax-free yield of 7 percent or a taxable yield of 9.5 percent give you a better return on your savings? Why? ADV V71. -- nere to search 17 40 101 %23 3. $4 4 7. 986
Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, calculate the TAX SHIELD. Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 Group of answer choices 101.36 158.33 82.85 46.37
a. Fill in the following table assuming MACRS depreciation rates (10 points) Year 0 1 2 3 4 5 6 Pretax income MACRS Taxable Depreciation income Tax owed After tax income Inflation adjustment factor Real after tax income b. If MARR = 18%, should you purchase this system based on your real after-tax income? Why or why not? (5 points)
You purchase a tax-free municipal bond paying an annual rate of 6 percent.Find the before-tax rate if you are in thea. 15-percent tax bracket.b. 28-percent tax bracket.c. 36-percent tax bracket.
which of these two has a higher after-tax yield, assuming a 21% income tax bracket? a. 4.00% taxable b. 3.25% tax-free band
If an after-tax rate of return = 10% is required and the Effective tax rate is 35%. What is the estimated MARR for before tax economic analysis. Select one: a. 13.4 % b. 19.4 % c. 17.4 % d. 15.4 %
An investor is trying to decide between a muni paying 5.75% or an equivalent taxable corporate paying 8.25%. What is the minimum marginal tax rate the investor must have to consider buying the municipal bond? A. 30.00% B. 25.00% C. 66.67% D. 20.00%
1. You have the following information Interest charges = JD 50 000 per year Tax rate = 40% Net Income= JD 90 000 Required: What is the fim's times-interest-earned (TIE) ratio?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS