What interest rate would have to be set on a for-profit


1. Assume that Jane Richards pays income taxes at a 35 percent rate. She currently owns a not-for-profit (municipal) bond that pays 5 percent interest. What interest rate would have to be set on a for-profit (corporate) bond to produce the same amount of usable (after-tax) income? please use this formula AT = BT x (1-T)

2. You have calculated the following returns for an individual stock:

Periods               Return

Month 1                 6.21%

Month 2                 1.08%

Month 3               16.03%

Month 4              7.53%

Month 5                -1%

What is the stock's expected rate of return?

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Financial Management: What interest rate would have to be set on a for-profit
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