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[DOC File]Bond Yields and Prices
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D*can be used to calculate the bond’s percentage price change for a given change in interest rates. Ex. Yield on 8% 5 year bond selling at par has duration* of 4.31 years rates go to 71/2%. ΔP/P = - 4.31* (-.005) = .0216 =2.16%. Convexity. If you have large yield …
calculating tax equivalent yield

[DOC File]Chapter 10
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Realized compound yield is 4.166% (semiannually), or 8.332% annual bond equivalent yield. To obtain this value, first calculate the future value of reinvested coupons. There will be six payments of $35 each, reinvested semiannually at a per period rate of 3%:
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[DOC File]Multiple Choice Questions
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The 8% bonds will be redeemed at nominal value in six years’ time. Close Co pays tax at an annual rate of 30% per year and the ex-dividend share price of the company is $8.50 per share. Required: (a) Calculate the value of Close Co using the following methods: (i) net asset value method; (ii) dividend growth model; (iii) earnings yield method.
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[DOC File]Chapter 7: Net Present Value and Capital Budgeting
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Apply the standard annuity formula to calculate the present value of the annual depreciation tax shield. PV(Depreciation Tax Shield) = $68,000A200.12 Recall that the least that the firm will charge for its initial lease payment is the amount that makes the present value of future cash flows just enough to compensate it for its $4,000,000 purchase.
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[DOC File]FIN 32 - Argosy University
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The formula for the computation is as follows: Tax-equivalent yield = tax-exempt yield / [1 – marginal tax rate (federal + state)] If the interest rates are expected to decrease in the near future, which of the following combinations of strategies is recommended?
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[DOCX File]www.smtbstore.com
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The investor's bond equivalent yield on this investment is _____. A) 4.8%. B) 4.97%. C) 5.47%. D) 5.74%. Answer: B. Explanation: $9,800 = $10,000 × ... but wishes to calculate the taxable equivalent yield . r. The formula she should use is given by _____. A) r = r. m ... What is the tax exempt equivalent yield on a 9% bond yield given a ...
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[DOC File]The major formulas for present value (these will reappear ...
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Remember to tax effect any operating cash flows before calculate NPV. For a detailed example, see Q5 of Problem Set #4. Equivalent Annual Costs: When we compare or choose between cash flow streams of different lengths, EAC should be used. Steps: 1. Calculate Projects’ NPVs. 2.
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[DOC File]Agricultural Economics 330
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T F Allowable depreciation and interest expenses are both multiplied by the marginal tax rate to calculate tax savings. T F When calculating the annual loan payment for a fully amortized loan, the contractual rate is multiplied by (1-marginal tax rate). T F Corn …
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[DOC File]Solutions to Chapter 1
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The analyst should be using yield to maturity instead of current yield to calculate cost of debt. [This answer assumes the value of the debt provided is the market value. If it is the book value, then 12.5% would be the average coupon rate of outstanding debt, which would also be a poor estimate of the required rate of return on the firm’s debt.]
calculating tax equivalent yield

Calculate tax equivalent yield formula