Moving to another question will save this response. Question 1 For a 30% tax bracket, what corporate taxable yield is equivalent to a 7% municipal bond rate? a. 8.6% b. 4.2% O c. 4.9% Od. 10%
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- Using the same data for 2 parts: Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21% Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 Part A) Discount the year 4 expected payment back to time 0 (today). a) 9.31 b) 10.11 c) 13.65 d) 6.50 Part B) Calculate the Tax Shield a) 101.36 b) 46.37 c) 158.33 d) 82.85Using 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 46.37Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, calculate the TAX SHIELD. %3D Expected interest year 1 = 50; year 2 35; year 3 = 20; year 4 10; 5 = 0 %3D !! %3! O 101.36 O 158.33 82.85 O 46.37
- 2. If an after-tax rate of return of 10% is required, and the effective tax rate is 30%, what is the MARR for the before-tax economic analysis?Which sales tax and tip would be equivalent to the given increase? The tip is calculated on the value after the sales tax. Select Option A or Option B. Option A Option B Row 1 Sales tax of 10% and tip of 10% Sales tax of 11% and tip of 10% Increase of 21% Row 2 Sales tax of 15% and tip of 20% Sales tax of 14% and tip of 24% Increase of 38% Row 3 Sales tax of 10% and tip of 30% Sales tax of 13% and tip of 30% Increase of 43%Exhibit 1 Pre-tax rate of return: r= 0.10 Tax rate on the returns to investment: t = 0.25 Consider the information in the exhibit above. If the government spending displaces private consumption, then the opportunity cost for the government project should a. 0.075 11. b. 0.10 c. 0.25 d. 0.75 Consider the information in the exhibit above. If the government spending displaces private savings, then the opportunity cost for the government project should a. 0.075 b. 0.10 c. 0.25 d. 0.75 12.
- uppose you had the following propositions of returns from two companies W and Y: Company Returns (OMR) Comments W 1204 Company W proposes to give 1204 Rial today Y 1550 Company Y proposes to give you 1550 but after 2 years You also know that the Interest Rate is by 10%.Question: In which company do you choose to invest your money and why?Assume that the nominal after-tax net return for year 1: $45, year 2: $47, year 3: $49. The after tax risk adjusted discount rate is 6%, the growth rate is 3%, and the inflation rate is 4%. What is the present value of the after-tax net return? O $125.42 O $134.62 O $158.47 None of the answers are correctScenario 1: Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending to .
- Part AUsing the following free cash flows and cost of equity = 7%, discount FCF year 1 back to time 0 (today). FCF year 1 = 500; FCF year 2 = 520; FCF year 3 = 560; FCF year 4 = 590; FCF year 5 = 610 a) 429.36 b) 467.29 c) 512.85 d) 422.10Part B Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, discount the year 4 expected payment back to time 0 (today). Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 a) 9.31 b) 10.11 c) 13.65 d) 6.50Consider a perpetuity with a coupon of 100. Imagine that the perpetuity is purchased at time t when the market interest rate is equal to 5%. Furthermore, imagine that the coupon income is taxed at 40% and that capital gains are taxed at 20%. What is the after tax rate of return if the perpetuity is sold at time t+1 when the market interest rate continues to be equal to 5%? 0% O 2% 5% None of the abovec. What do you expect its price to be one year from now? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) d-1. What is the implied capital gain? (Do not round intermediate calculations. Round your final answer to 1 decimal place.)