1. An investor purchases one municipal bond and one corporate bond that pay rates of return of 5% and 6.4%, respectively. If the investor is in the 15% tax bracket, what would be his after-tax rates of return on the municipal and corporate bonds, respectively?
2. Barnegat Light sold 200,000 shares in an initial public offering. The underwriters explicit fees were $90,000. The offering price for the shares was $35, but immediately upon issue, the share price jumped to $43. What is the best estimate of the total cost of Barnegat Light of the equity issue?
3. Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the net asset value (NAV) of these shares?