Purchase Solution

after-tax yields

Not what you're looking for?

Ask Custom Question

The condominium - expected annual increase in market value = 2%.
Municipal bonds - expected annual yield = 3%.
High-yield corporate stocks - expected dividend yield = 5%.
Savings account in a commercial bank-expected annual yield = 1%.
High-growth common stocks - expected annual increase in market value = 6%; expected dividend yield = 0.
Calculate the after-tax yields on the foregoing investments, assuming the Brittens have a 28% marginal tax rate (based on Public Law 108-27, The Jobs and Growth Tax Relief Reconciliation Act of 2003).
How would you recommend the Brittens invest their $40,000?

Purchase this Solution

Solution Summary

Calculate the after-tax yields on the foregoing investments in this case.

Solution Preview

Dear Student,

Thank you for using BM.
Below are my answers.

ANSWERS
Please see attached file for answers.

======================

Analysis of investments

Condominium Municipal Bonds High-Yield Corporate Stocks Savings Account High-growth Common Stocks
Increase in market value 2% 0 0 0 6%
Expected annual yield 0 3% 0 1% 0
Expected dividend yield 0 0 5% 0% 0
Total expected yield 2% 3% 5% 1% 6%
Tax ...

Purchase this Solution


Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.