Chat with us, powered by LiveChat You have narrowed your investment choices down to municipal bonds yielding 7% or equally risky corporate bonds with a yield of 10%. Which one should you choose and why? At what marginal t - Essayabode
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19 Dec You have narrowed your investment choices down to municipal bonds yielding 7% or equally risky corporate bonds with a yield of 10%. Which one should you choose and why? At what marginal t

Posted at 03:26h in Market Value Added (MVA) is the difference between the market value of Computron's stock and the amount of equity capital supplied by shareholders. ... by

000 Corporate interest rate 10% Municipal interest rate 7% Tax Rate 25.0% After-tax interest Corporate = Pre-tax interest – tax on interest = Muni = Pre-tax interest = There is no tax on the muni Tax rate at which you would be indifferent After-tax yield on muni versus corp bond Muni Yield = Corp Yield *(1-Tax rate) Solve for T Tax rate = 1 – (Muni yield / Corp yield) Tax Rate =

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