1. A municipal bond yields 8.45 percent. An investor in a marginal 33.8 percent tax bracket is comparing this bond with a similar corporate bond. What is the equivalent taxable yield on the municipal bond?
2. Compute ROE and the sustainable growth rate for Ahearn, Agostino and Arose (AAA) How is EPS related to ROE? Derive EPS. Here is given. Net profit margin is .05, ATO is 1.8, financial leverage is 2, Retention ratio is .4, the BVPS is $4. Explicate how EPS can be misleading in expressing performance in the aforementioned case. PLEASE: Show All Steps, Show All Work, NO Excel.