![michael4443](/avatars/43006.jpg)
michael4443
27.06.2020 •
Business
A 7-year municipal bond yields 4.8%. Your marginal tax rate (including state and federal taxes) is 39.00%. What interest rate on a 7-year corporate bond of equal risk would provide you with the same after-tax return
Solved
Show answers
More tips
- H Health and Medicine What to Take with You to the Maternity Hospital?...
- F Family and Home How to Choose the Perfect Air Conditioner for Your Life...
- H Health and Medicine Discover the Hidden Principles and Real Results of the Japanese Diet...
- H Health and Medicine Understanding Pregnancy Tests: What You Need to Know?...
- H Health and Medicine What Makes a Man a Man?...
- C Computers and Internet How to Get Rid of Spam in ICQ?...
- A Art and Culture Who Said The Less We Love a Woman, the More She Likes Us ?...
- F Family and Home How to Get Rid of Your Neighbors?...
- S Society and Politics How Could Nobody Know About the Dead Mountaineers?...
- H Health and Medicine How to Cure Adenoids?...
Answers on questions: Business
- C Chemistry What kinds of intermolecular forces does NBr3 capable of...
- A Advanced Placement (AP) Question 1(multiple choice worth 2 points) an environmental impact statement refers to an analysis of possible effects of a project. reports prepared after a geographic...
- P Physics Write in complete sentences explaining why you defend the property of your choice, based on your knowledge of science....
Ответ:
The interest rate on corporate bond is 7.87 percent.
Explanation:
The yield on 7-year municipal bond = 4.8%
Given marginal tax rate = 39 percent
Now calculate the interest rate on 7 year corporate bond that has equal risk.
Use the below formula. Here, yield from both type of bond is equated that is yield from corporate bond and yield from municipal bond because it is given that both gives same return after tax.
Interest rate on corporate bond × (1-tax rate) = Municipal bond yield
Interest rate on corporate bond × (1- 0.39) = 4.8![\text{Interest rate on corporate bond} = \frac{4.8}{0.61} = 7.87 \ percent](/tpl/images/0696/1950/2248f.png)
Ответ:
sure wat do u do on it
Explanation: