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A 5-year corporate bond yields 8 percent a 5-year municipal bond of equal risk yields 6 percent the state tax rate is 0 at what federal tax rate are you indifferent between bonds?
To find the federal tax rate at which the buyer would be indifferent between Muni bonds(which are tax free) and Corporate bonds(which fall under your tax bracket tax rate) you… follow this simple formula: Corporate Bond Yield=(Municipal bond Yield)/(1- Federal tax rate) In this case you would solve for the Federal Tax Rate and get an answer of .25 or 25% http://luhman.org/Nts/Bond/140_Municipals.html
What is the face Value if maturity is 7 years Coupons are paid annually at rate of 5 and Yield to maturity is 7?
You're missing one of the following: * Coupon value * Bond present/purchasing value As it stands, there's insufficient information.
If a bond with face value of 1100 and a coupon rate of 8 is selling at a price of 970 is the bond's yield to maturity more or less than 8 and what is the current yield?
When a bond sells at a discount, the yield is higher than the coupon rate. Your income is 1,100 x 8% = 88. You invested 970. 88/970 = 9.07% yield.
A 6-year Circular File bond pays interest of 80 annually and sells for 950 What are its coupon rate current yield and yield to maturity?
Bond Pricing. A 6 year circular file bond pays interest of $80 annually, and sells for $950. What are its coupon rate, Current yield, and yield maturity?
If two bonds have the same maturity the same yield to maturity and the same level of risk the bonds should they sell for the same price regardless of the bond's coupon rate?
if two bonds offer the same duration and yield, then an investor should look at their levels of convexity. if one bond has greater convexity, it is less affected by interest r…ate changes. also, bonds with higher convexity will have higher price than bonds with lower convexity regardless whether interest rates rise or fall. Ergo, investors will have to pay more with greater convexity due to the bond's lesser sensitivity to interest rate changes.
Price and Yield- An 8 percent semiannual coupon matures in 5 years The bond has a face value of 1000 and a current yield of 8.21 percent What are the bonds price and YTM?
The bond's price is $996.76. The YTM is 8.21%. by E. Sanchez
Anant purchases a bond whose face value is Rs 1000 maturity period 5 years coupled with a nominal interest rate of 8 persent The required rate of return is 10 percent what price hould he pay?
A firm has an issue of 1000 par value bonds with a 12 percent stated interest rate outstanding The issue pays interest annually and has 10 years remaining to its maturity date If bonds of similar r?
The Heuser Company's currently outstanding bonds have a 10 percent coupon and a 12 percent yield to maturity Heuser believes it could issue new bonds at par that would provide a similar yield to matu?
After cost of debt = 12% x (1-0.35) = 7.8%
A ten-year bond with par value equals1000 pays 10 percent annually if sismilar bonds are currently yielding 6 percent annually what is the market value of the bond use semi-annual analysis?
To help finance a major expansion ABC Inc sold a noncallable bond several years ago that now has 15 years to maturity This bond has a 10.25 percent annual coupon paid semiannually. trading price?
You need to know the current yield of the bond to answer this question. The yield would be a function of the current risk free rate (likely a simlar maturity Treasury security… if ABC issued in US dollars) and the current risk premium or credit spread for ABC.
A 1000 par value 12-year bond with a 9 percent coupon rate recently sold for 980 What is the yield maturity rate?
Yest Corporation's bonds have a 15 year maturity a 7 percent semiannual coupon and a par value of 1000?