With a 28 percent marginal tax rate, would a tax-free yield of 7 percent or a taxable yield of 11.0 percent give you a better return on your savings?
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- With a 28% marginal tax rate, would a tax free yield of 7% or taxable yeild of 9.5% give you a better return on your savings? why?7. Comparing Taxable and Tax-Free Yields. With a 28 percent marginal tax rate, would a tax-free yield of 7 percent or a taxable yield of 9.5 percent give you a better return on your savings? Why? ADV V71. -- nere to search 17 40 101 %23 3. $4 4 7. 986Suppose your principal investment is $1800 and you have a nominal interest rate of 6.5%. what is your nominal interest income? Presume you are taxed at the 22% tax rate, who much will you pay in taxes and what is your after tax nominal income? Presume inflation was 2.7% during the year, what is the loss of principal due to inflation? What is your real interest income? What is after-tax real interest income?
- Big Refund: Does wise financial planning include getting a large income tax refund each year? Why or why not?Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, calculate the TAX SHIELD. Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 Group of answer choices 101.36 158.33 82.85 46.376. Suppose you are in a 35% tax bracket and your investments yield 10%. Compute what will happen to your after-tax real return if the inflation rate rises from 4% to 6%?
- Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, calculate the TAX SHIELD. Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 a) 101.36 b) 46.37 c) 158.33 d) 82.85An interest payment of $650 in a 20 percent tax bracket would result in atax savings of __________________.Realistically, how could you increase your income? How would you like your income statement for the next year to look?
- Suppose you are in the 25% marginal tax bracket and earn $15,000. Then a tax credit of $1500 will reduce your tax bill by how much?Assume that the nominal after-tax net return for year 1: $45, year 2: $47, year 3: $49. The after tax risk adjusted discount rate is 6%, the growth rate is 3%, and the inflation rate is 4%. What is the present value of the after-tax net return? O $125.42 O $134.62 O $158.47 None of the answers are correctConsider a perpetuity with a coupon of 100. Imagine that the perpetuity is purchased at time t when the market interest rate is equal to 5%. Furthermore, imagine that the coupon income is taxed at 40% and that capital gains are taxed at 20%. What is the after tax rate of return if the perpetuity is sold at time t+1 when the market interest rate continues to be equal to 5%? 0% O 2% 5% None of the above