11. Municipal Bonds: Why is it that municipal bonds are not taxed at the federal level, but are taxable across state lines? Why is it that U.S. Treasury bonds are not taxable at the state level? (You may need to dust off the history books for this one.)
If it"s the company"s policy to always maintain a constant growth rate in its dividends what is the current dividend per share? 4. Gruber Corp. Pays a constant $12 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease...
a convertible bond is currently selling for $945. it is convertible into 15 shares of common stock that presently sell for $57 per share. what is the conversion premium?
Allen Corporation is planning to expand into the fast developing business of renting video movies. Allen has debt-to-equity ratio of 1, its pretax cost of debt is 15%, and its marginal tax rate is 40%. The Gardner Corporation is already in the video business, has a of 1.5, debt-to-equity ratio...
Dexter Mills issued 20-year bonds a year ago at a coupon rate of 11.4 percent. The bonds make semiannual payments. The yield-to-maturity on these bonds is 9.2 percent. What is the current bond price?
please answer question 4
Bond A is a 2 year 3% coupon bond due Oct 2013, YTM 1.454% Bond B is a 10 year 5% coupon bond due June 2021, YTM 2.21% Assume you believe the yield spread between the 10 year and 2 year bond will widen. Describe a trading strategy to profit from such a widening (assuming you will buy or sell...
Please see the attached word document. word limit 800 words.
finance question. please read the attached word document.
please read the attached document. word limit 700 words.
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1. Can you help me with this valuation problem?: Imagine that you are trying to evaluate the economics of purchasing an automobile. You expect the car to provide annual after-tax cash benefits of $1,200 at the end of each year and assume that you can sell the car for after-tax proceeds of $5,000 at the end of the planned 5-year ownership period. All funds for purchasing the car will be drawn from your savings, which are currently earning 6% after taxes.
- a.Identify the cash flows, their timing, and the required return applicable to valuing the car.
- b.What is the maximum price you would be willing to pay to acquire the car? Explain.
2. How do you calculate the before tax-cost of the Sony bond and the after-tax cost of the Sony bond given the following information?:
- David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:
- Sony bond
- Par value $1,000 Coupon interest rate 6% Tax bracket 20%
- Cost $930 Years to maturity 10