What is the bonds after-tax yield

Assignment Help Finance Basics
Reference no: EM13324190

Corporate bonds issued by Johnson Healthcare currently yield 8 percent.

a. If an investor is in the 34 percent tax bracket, what is the bond's after-tax yield?

b. Municipal bonds of equal risk currently yield 6 percent. At what tax rate would an investor be indifferent between these two bonds?

c. Which bond should an investor in the 34 percent tax bracket invest in?

Reference no: EM13324190

Questions Cloud

How to select the pit from which the soil should be bought : The void ratio of the compacted fill is specified as 0.7. Four borrow pits are available along with each of the respective void ratios along with the cost per cubic meter for moving the soil to the proposed construction site.
What is the magnitude of his displacement : A delivery man travels 34.0 m north, 23.0 m east, 12.0 m south, then takes an elevator 32.0 m up into a building. What is the magnitude of his displacement
Dilemmas in health care : Dilemmas in Health Care
What is the diameter of the star : You are on an unknown planet orbiting an unknown star. When the 108 cm long camera is pointed at the star an image is formed that is 1 cm in diameter, what is the diameter of the star
What is the bonds after-tax yield : Corporate bonds issued by Johnson Healthcare currently yield 8 percent- If an investor is in the 34 percent tax bracket, what is the bond's after-tax yield?
Explain the concentration of m1+ in a saturated solution : The solubility of MX2 is 8.91e-07 M. What is its Ksp to three sig figs? What is the molar solubility of M2X (Ksp = 1.38e-10)? M What is the concentration of M1+ in a saturated solution of M2X? M
Can you think of a reason this policy might be efficient : It is rumored that the Swiss government subsidizes cattle farming and that the subsidy is larger in areas with more tourist attractions. Can you think of a reason this policy might be efficient?
Post an original and thoughtful response to the db : At a minimum, each student will be expected to post an original and thoughtful response to the DB question and contribute to the weekly dialogue by responding to at least two other posts from students.
What are some economic social and political reasons that : What are some economic, social, and political reasons that make economic growth important to a nation? How could a population increase contribute to economic growth, and how could it hinder growth?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the discounted payback period

What is the discounted payback period for these cash flows if the initial cost is $5,900?

  Calculate the fair present values of the bonds

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 12 years remaining to maturity.

  Calculate selling price on the margins provided

As the Marketing Manager for the Zig brand of microwave ovens in a large customer products company you must answer questions found below with following financial data regarding product.

  Explain what the opm is all about

The Black Scholes OPM was a major break-through in find the value of Options and other types of investments. Please explain what the OPM is all about and what is it that gives investors some assurance of correctness when Valuing certain types of i..

  What is the contribution margin per procedure and break-even

what is the contribution margin per procedure and break-even point?

  Growth rate for a stream of cash flows

An interest or increase rate for a stream of cash flows can be found by first doing which of the following, The value of any asset depends upon which the following?

  Which of the following will hold true

Company A uses lifo and Company B uses fifo for inventory valuation. Otherwise, the firms are of similar size and have the same revenue and expenses. Assuming inflation, analyze liquidity and profitability of the two firms. Which of the following ..

  Compute the current value per share of stock

Shara Miselle Co. just paid a dividend of $1.65 on it's common stock. This companys dividend are expected to grow at a constant rae of 3% indefinately. If the required rate of return on this stock is 11%, compute the current value per share of sto..

  What is the standard deviation of your return

The returns on your portfolio over the last 5 years were -5%, 20%, 0%, 10% and 5%. What is the standard deviation of your return?

  How much would it cost him to buy the annuity today

Your father is about to retire, and he wants to buy an annuity that will provide him with $91,000 of income a year for 25 years, with the first payment coming immediately.

  Demand function has a negative slope

Over the past twenty years, the number of small family farms has fallen significantly also in their place there are fewer, but larger, farms owned by corporation.

  Difference between a short, medium and long term loan

Describe the difference between a short term, medium term and a long term loan. Use the following situations to describe the relative size of the interest rates charged on the following types of loans:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd