's Week 3-#5-1 - What is the difference between total tax...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
What is the difference between total tax and marginal tax? If a question asks you to calculate your total tax payable for $85,000 in employment income and $10,000 of interest earned on an investment … If a question asks you to calculate the tax payable on your investment income only with $85,000 in employment income and $10,000 of interest earned on an investment….
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Types of Investments: BONDS What are the characteristics of a bond? debt for issuer indenture fixed rate of return fixed term safety
Background image of page 2
Type Features Benefit to: Secured Assets are pledged as collateral i.e. mortgage bond Investor Unsecured/ Debenture Only backed up by a “promise to pay” by issuer i.e. government bond Issuer Serial Staggered redemption dates in a bond series Issuer Callable/ Redeemable Allows issuer to ‘call’ it or pay it back earlier than original maturity date Issuer Types of Bonds
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Type Features Benefit to: Sinking Fund/ Purchase Fund Money is set aside for repayment of bonds via call, purchase on open market or redemption Issuer (though some peace of mind benefit to investor as well) Extendible/ Retractable Maturity date can be pushed back or forward Investor Convertible/ Exchangeable Right to exchange bond for common shares of company stock Investor Floating Rate Coupon rate floats with prevailing interest rates instead of being fixed for term Both parties Types of Bonds
Background image of page 4
investment for me? beneficial features yield = percentage of annual return on an investment In order to estimate yield, we must recognize and assume: bonds are often traded part way through their life when they are traded, they may be bought/sold at a price different than face value at the end of a bond’s life, the holder receives the face value ($1,000)
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/25/2010 for the course BUSINESS BU111 taught by Professor Yost during the Fall '10 term at Wilfred Laurier University .

Page1 / 22

's Week 3-#5-1 - What is the difference between total tax...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online