Tax rate

Related BrainMass Solutions

• Find the Equivalent Before-tax Interest Rate

  Before-tax interest rate * (1-income tax rate) = After-tax interest rate Before tax interest rate * (1-x) = After-tax interest rate Before-tax interest rate = After-tax interest rate/(1-x) Thus, the investor will demand a minimum of After-tax interest

• An explanation of the marginal tax rate and average tax rate

  That would be your new tax liability. It is $8 more. So, the incremental tax rate, the tax rate applied to the next $50 of earnings was $8 / $50 = 16%. This incremental tax rate is called the "marginal tax rate."

• After tax cost of debt

  of an example Tax rate = 30% (or in decimals 0.3) After tax cost of debt = Before tax cost of debt x (1-Tax rate) = 7% x (1-0.3) = 4.9% Tax rate = 50% (or in decimals 0.5) After tax cost of debt = Before tax cost of debt x (1-Tax rate) = 7% x (

• Rate of inflation, real interest rate, tax-free investment

  You best tax-free investment opportunity has an EAR of 3%. If your tax rate is 30%, which opportunity provides the higher after-tax interest rate? 22.

• Marginal Tax Rate Versus Averate Rate

  C's marginal tax rate, not his average tax rate, to determine the tax effect of his investment. Thank you for using Brainmass.

• Calculate the after-tax cost of debt under each of the following conditions:

  Interest rate, 13 percent; tax rate, 20 percent. c. Interest rate, 13 percent; tax rate, 35 percent.

• Understanding Municipal Bonds

  We are comparing the equivalent tax-free rate of two investments: 1) A taxable corporate bond that is at a rate of 10%, with a marginal tax of 30%, and 2) A tax-free municipal bond that is at a rate of 8%.

• EAR and Effective Tax Rate

  Marginal tax rate: percent.

• Principles of Finance Class (Lovell Co. and State of Pennsylvania bond issuance)

  After Tax Return (%) = Pretax Return (%)(1 - Tax rate (%)) In this case Pretax Return = 8.4% and Tax rate=0.4 Therefore, after Tax Return on the preferred stock = 8.4*(1-0.4)=5.04 % b.

• Calculate the after-tax cost of debt

  Interest rate, 13 percent; tax rate, 35 percent.