ricksterv5000
18.02.2020 •
Business
A municipal bond carries a coupon rate of 8.00% and is trading at par. What would be the equivalent taxable yield of this bond to a taxpayer in a 40% combined tax bracket? (Round your answer to 2 decimal places.)
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Ответ:
13.33%
Explanation:
The computation of the equivalent taxable yield is shown below:
Data provided in the question
Coupon rate = 8%
Combined tax bracket = 40%
So, the equivalent taxable yield by using the above information is
= (Coupon rate) ÷ (1 - tax rate)
= 8% ÷ 1 - 0.40
= 8% ÷ 0.60
= 13.33%
Basically we divide the coupon rate by the percentage after considering the tax rate
Ответ: