Finance

An investor in the 28 percent tax bracket is trying to decide which of two bonds to select: one is a 5.5 percent U. S. Treasury bond selling at par; the other is a municipal bond with a 4.25 percent coupon, which is also selling at par. Which of these two bonds should the investor select? Why?

  1. 👍 0
  2. 👎 0
  3. 👁 219
asked by Brent
  1. Interest on U.S. Treasury bonds is taxed at 28%. Interest on municipal bonds is not taxed.

    Do the math to figure out which is the better buy.

Respond to this Question

First Name

Your Response

Similar Questions

  1. Finance

    .An investor in the 28 percent tax bracket is trying to decide which of two bonds to select: one is a 5.5 percent U. S. Treasury bond selling at par; the other is a municipal bond with a 4.25 percent coupon, which is also selling

    asked by Tawanna on June 30, 2014
  2. MCC

    An investor in the 28% tax bracket is trying to decide which of two bonds to select: one is a 6.5% U.S. Treasury Bond selling at par; the other is a municipal bond with a 5.25% coupon, which is selling at par. Which of these two

    asked by Kayla on October 29, 2014
  3. Finance

    An investor in the 28% tax bracket is trying to decide which of two bonds to select: one is a 5.5% U.S. Treasury bond selling at par; the other is a municipal bond with a 4.25% coupon, which is also selling at par. Which of these

    asked by Kate on June 22, 2014
  4. Healthcare Finance

    Jane Smith currently holds tax-exempt bonds of Good Samaritan Healthcare that pay 7 percent interest. She is in the 40 percent tax bracket. Her broker wants her to buy some Beverly Enterprises taxable bonds that will be issued

    asked by Sharon on September 13, 2013
  5. Finance

    Jane Smith currently holds tax-exempt bonds of Good Samaritan Healthcare that pay 7 percent interest. She is in the 49 percent tax bracket. Her broker wants her to buy some Beverly Enterprises taxable bonds that will be issued

    asked by Shelley on June 10, 2013
  1. Accounting

    Jane Smith currently holds tax-exempt bonds of Good Samaritan Healthcare that pay 7 percent interest. She is in the 49 percent tax bracket. Her broker wants her to buy some Beverly Enterprises taxable bonds that will be issued

    asked by Angel Wright on January 25, 2010
  2. Accounting

    John Doe is in the 40 percent personal tax bracket. He is considering investing in HCA bonds that carry a 12 percent interest rate. a. What is his after-tax yield(interest rate) on the bonds? b.Suppose Twin Cities Memorial

    asked by Angel Wright on January 25, 2010
  3. HealthCare Finance Bonds

    John Doe is in the 40 percent personal tax bracket. He is considering investing in HCA bonds that carry a 12 percent interest rate. a. What is his after-tax yield (interest rate) on the bonds? b. Suppose Twin Cities Memorial

    asked by Chris on May 25, 2013
  4. Health care finance

    John Doe is in the 40 percent tax bracket. He is considering investing in HCA bonds that carry a 12 percent interest rate. A. What is his after-tax interest rate on the bonds?

    asked by Meme on October 26, 2010
  5. Math

    Short Term municipal bonds currently offer yields of 4%, while taxable bonds pay 5%. Which gives you the higher after tax yield if your tax bracket is. a. zero b. 10% c. 20% d. 30%

    asked by Tiffany on May 18, 2008

More Similar Questions