Question
Dana intends to invest $66,000 in either a treasury bond or a corporate bond. The Treasury Bond yields 5 percent before tax and the corporate
Dana intends to invest $66,000 in either a treasury bond or a corporate bond. The Treasury Bond yields 5 percent before tax and the corporate bond yields 6 percent before tax.
A) Assuming dana's federal marginal rate is 24 percent and her marginal state rate is 5 percent, which of the two options should she choose? Assume the Dana itemizes deductions
Corporate bonds
Treasury Bonds
A2) How much interest after-tax would Dana earn by investing in the corporate bond?
B) if she were to move to another state were her marginal state rate would be 10 percent, which of the two options should she choose? Assume that Dana itemizes deductions
Corporate Bonds
Treasury Bond
B2) how much interest after-tax would Dana earn by investing in the corporate bond as per requirement B)?
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