What tax rate would investor be indifferent in two bonds

Assignment Help Financial Management

Reference no: EM131312314

Personal After-Tax Yield

An investor recently purchased a corporate bond which yields 10.5%. The investor is in the 34% combined federal and state tax bracket. What is the bond's after-tax yield? Round your answer to two decimal places.

Corporate bonds issued by Johnson Corporation currently yield 11.5%. Municipal bonds of equal risk currently yield 6%. At what tax rate would an investor be indifferent between these two bonds? Round your answer to two decimal places.

Talbot Enterprises recently reported an EBITDA of $7.5 million and net income of $2.625 million. It had $2.85 million of interest expense, and its corporate tax rate was 30%. What was its charge for depreciation and amortization? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.

Kendall Corners Inc. recently reported net income of $4.1 million and depreciation of $697,000. What was its net cash flow? Assume it had no amortization expense. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.

Reference no: EM131312314

Questions Cloud

Annual percentage yield for savings account : What would be the annual percentage yield for a savings account that earned $26 in interest on $400 over the past 365 days?

Future value-determine the savings amount : For each of these situations, determine the savings amount. Use the time value of money tables in Exhibit 1-A, Exhibit 1-B, Exhibit 1-C. What would be the future value of a savings account started with $700, earning 10 percent (compounded annually) a..

What was the balance in the retained earnings : Smith Co had retained earnings of 60,000 at the end of the current year. For the current year, the income was 30,000 and dividends were 10,000. What was the balance in the retained earnings at the end of the prior year? 40,000 20,000 60,000.

What is meant by a march cycle with option contracts : What are some advantages of the early exercise feature of American options? What is meant by a “March cycle” with option contracts? Which contracts trade? What is meant by an offsetting order? Why can’t options be bought on margin?

What tax rate would investor be indifferent in two bonds : An investor recently purchased a corporate bond which yields 10.5%. The investor is in the 34% combined federal and state tax bracket. What is the bond's after-tax yield? Corporate bonds issued by Johnson Corporation currently yield 11.5%. Municipal ..

Which project is financially acceptable : Assume you are the Chief Financial Officer at Porter Memorial Hospital. The CEO has asked you to analyze two proposed capital investments - Project X & Project Y. Each project has a net investment outlay of $10,000 and the opportunity cost for each p..

Regard salvage value as negative term of cost : An improvement to the roadway is desired from Philmont Scout Ranch to Springer in northeastern New Mexico. Alternative N (for north) costs $2, 400,000 initially and $ 155,000/year thereafter. The salvage values (regard salvage value as negative term ..

Then the times interest earned ratio will be overstated : If a firm has substantial capital or financing leases disclosed in the notes but not capitalized in the financial statements, then the times interest earned ratio will be overstated, the fixed charge ratio will be overstated, the debt ratio will be u..

Coupon bonds outstanding with current market price : Redesigned Computers has 5 percent coupon bonds outstanding with a current market price of $876.85. The yield to maturity is 6.34 percent and the face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?

User Account

All Pages