14. You plan to invest an amount of money in five-year certificate of deposit (CD) at your bank. The stated interest rate applied to the CD is 12 percent, compounded monthly. How much must you invest if you want the balance in the CD account to be $8,500 in five years? (Points : 5)
15. As a corporate investor paying a marginal tax rate of 34 percent, if 70 percent of dividends are excludable, what would be your after-tax dividend yield on preferred stock with a 16 percent before-tax dividend yield? (Points : 5)
16. Which of the following statements is correct? (Points : 5)
For the most part, our federal tax rates are progressive, because higher incomes are taxed at higher average rates.
Bonds issued by a municipality such as the city of Miami would carry a lower interest rate than bonds with the same risk and maturity issued by a private corporation such as Florida Power & Light.
Our federal tax laws tend to encourage corporations to finance with debt rather than with equity securities.
Our federal tax laws encourage the managers of corporations with surplus cash to invest it in stocks rather than in bonds. However, other factors may offset tax considerations.
All of the above statements are true.
Dear Student Please find... View the full answer