X Problem P5-9 (similar to) Question Help
Based on the after-tax retums, at what federal tax rate (as shown in Chapter 4) is an investor better off choosing a tax-exempt 7 16 percent municipal bond over a
taxable 10.39 percent corporate bond?
The after-tax retum on the corporate bond when the tax rate is 10% is %

The after-tax rate for the Corporate Bond when the tax rate is 10% is 9.35%

Step-by-step explanation:

The investor is better of at any rate above 30%, i.e 31% of tax rate would give the investor 7.1691% return ( 10.39  −  ( 10.39  ⋅  31 % ) )

Thus the return from the tax exempt municipal bond would be higher than the return from the taxable corporate bond.

The after-tax rate for the Corporate Bond when the tax rate is 10% is 9.35%( 10.39  −  ( 10.39  ⋅  10 % ) )

d. $180

step-by-step explanation:

if the dimensions of the room is 9ft by 12 ft, we have the area of the floor as,

so the area of the floor is 108 square feet, converting that into square yards we get,

the cost of carpet is $15 per square yard, therefore the cost of carpet for 12 square yards is,

hence, the cost of carpet is $180.

assuming the dimensions of the room be,

15 ft by 12 ft

so, the area of the floor of that room is,

we can convert 180 square feet into square yards, we know that,

1 sq ft = 0.111 sq yard

so, 180 square feet is,

so the area of floor is 20 square yards.

now, the cost of carpet is 15 dollars per square yard, therefore the cost of carpet for 20 square yards is,

so, it will cost $300.