1 assume that a short-term municipal bond pays interest of, Ask an Expert

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1. Assume that a short-term municipal bond pays interest of 3% while a similar taxable bond pays interest of 4%. If your marginal tax rate is 15%, which is the better investment? At what tax rate are you indifferent between the two bonds?

2. McCormac Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.35, and a dividend payout ratio of 54 percent. The ratio of total assets to sales is constant at 1.32.

Required:

What profit margin must the firm achieve?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92654055

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