Assignment Help - homework help

If i invests 200000 in a bond that pays 6 percent interest


Question - If I invests $200,000 in a bond that pays 6 percent interest, or $200,000 in a bond that pays 8 percent interest and my marginal tax rate is 25 percent.

1) What is the after tax rate of return for the 6% bond?

2) How much explicit tax will I pay on the 6% bond?

3) How much implicit tax will I pay on the 6% Bond?

4) How much explicit tax will I have on the 8% Bond?

5) What is the after tax rate on the 8% bond?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: If i invests 200000 in a bond that pays 6 percent interest
Reference No:- TGS02694012

Now Priced at $25 (50% Discount)

Recommended (90%)

Rated (4.3/5)