User Account

All Pages

Which of the two bond will be more beneficial

Assignment Help Finance Basics
Reference no: EM133118855

Consider the decision to purchase either a five year corporate bond or a five year municipal bond. The corporate bond has a 13% annual coupon with a par value of $1000 with a current yield of 11%. The municipal bond has 11% annual coupon and a par value of $1000 that is currently yielding at 9%. Which of the two bond will be more beneficial to you. Assume that your marginal tax rate is 30%.

Reference no: EM133118855

Questions Cloud

Expect a 6-year bond : Using the same information, what interest rate would you expect a 6-year bond to have under the liquidity premium theory?
What is the total amount debited to finished goods inventory : Walter Company uses a job-order costing system to account for product costs. What is the total amount debited to Finished Goods Inventory in the current year
Objectives for children education and retirement : Based on the level of savings that Jimmy and Jane needs to achieve over the next 15 years, discuss the feasibility of his achieving his objectives for his child
Calculate the price of the corporate bond : You, as an investor, are comparing two bonds: a corporate and a municipal. They both have a face value (par) of $1,000 and a 5-year term to maturity.
Which of the two bond will be more beneficial : Which of the two bond will be more beneficial to you. Assume that your marginal tax rate is 30%.
What is the overall payout : a) You want to add positions in a 1-year K = 50 call option such that your overall payout at t = 1 will be the same for any value S1 = 50 (In other words, the p
Define cost pool, cost allocation, and cost-allocation base : Why should managers worry about product overcosting or undercosting? (35-50 words) Define cost pool, cost allocation, and cost-allocation base
Price of a three-year risk-free bond with face value : What is the price of a three-year risk-free bond with face value of $100 and coupon rate of 3.5%
What is the current yield : A $1,000 bond with a coupon rate of 6.5% has a market price of $950. What is the current yield?

Reviews

Write a Review

Finance Basics Questions & Answers

  Put option with a current value

A put option with a current value of $7.80. Both options written on the same stock, with 1 year until expiration, and a strike price of $44.00.

  Provide an analysis of the company performance

Recently the company faced cash problems and approached your for advice. The following ratios were computed by their junior accountant

  Blogging platform that you prefer like facebook

1. Research ten (10) commonly used words related to your chosen track which is ABM, their definition, and examples for each when used in a sentence.

  A firm has net income of 100 dividends of 35 assets of

a firm has net income of 100 dividends of 35 assets of 4000 and a debt equity ratio of 4.0. what is the sustainable

  Describe the meaning of a state of nature

Describe the meaning of a "state of nature" and explain how this concept is used to provide expected measures of return and risk.

  Determine the current market prices of the following 1000

determine the current market prices of the following 1000 bonds if the comparable rate is 10 and answer the following

  Sports marketing example

Do you think marketing in sports is really different than marketing any other type of product or services? Justifying your answer with a sports marketing exampl

  What is altman z- score model

What is Altman's Z- Score model. Why it is used? What calculated value of z- score model tell? Wich is more important variable in z-score model?

  Compute the realized rate of return for an investor

Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

  What would be the venture equity value

A. If the venture’s equity value is $2.45 million, what would be the associated enterprise value? B. Assume the venture’s enterprise value has been estimated to be $5.3 million (ignore any information from Part A). What would be the venture’s equity ..

  Compute the proceeds of each bond issuance

For each bond issuance, indicate whether the interest expense recognized each period will increase, decrease, or remain constant over the life of the bond.

  Explain what is meant by an abs and an abs cdo

What was the role of GNMA (Ginnie Mae) in the mortgage-backed securities market of the 1970s? - Explain what is meant by (a) an ABS and (b) an ABS CDO.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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