1. A 5-year corporate bond yields 9 percent. A 5-year municipal bond of equal risk yields 6.5 percent. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? [Set your calculator to at least four decimal places]
27.78%
33.33%
41.22%
54.33%
72.22%
2. Suppose a stock had an initial price of $52 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $67. Compute the percentage total return.
24.55
31.63
33.22
40.38