Question
Anne's marginal income tax rate is 32 percent. She purchases a corporate bond for $10,000 and the maturity, or face value, of the bond is
Anne's marginal income tax rate is 32 percent. She purchases a corporate bond for $10,000 and the maturity, or face value, of the bond is $10,000.(Round your answers to 2 decimal places.)
a.If the bond pays 6.6 percent per year before taxes, what is Anne's annual after-tax rate of return from the bond if the bond matures in one year?
Annual after tax rate of return___?
b.What is her annual after-tax rate of return if the bond matures in 10 years?
Annual after tax rate of return___?
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
