Yields on municipal bonds with tax benefit are typically ________ yields on corporate bonds of similar...

Question

Question

Yields on municipal bonds with tax benefit are typically ________ yields on corporate bonds of similar risk and time to maturity.

Group of answer choices

a) lower than

b)twice as high as

c)identical to

d)slightly higher than

business finance

Answer 1

Answer #1

lower than

because municipal bonds are tax free, so they comes at low yields

the above is answer..

Answer 2

Similar Homework Help Questions

1 - Yields on municipal bonds with tax benefit are typically ________ yields on corporate bonds...

1 - Yields on municipal bonds with tax benefit are typically ________ yields on corporate bonds of similar risk and time to maturity. Group of answer choices lower than twice as high as identical to slightly higher than 2- When a coupon bond matures, the issue pays the principal but not the coupon. Group of answer choices True False 3- Price a 2-yr 5% semiannual coupon bond with a par value of $1000 and the yield to maturity (discount rate)...
The yields on government bonds are usually less than yields on corporate bonds of similar maturity...

The yields on government bonds are usually less than yields on corporate bonds of similar maturity because: a. Corporate bonds have a shorter maturity than government bonds b. Government bonds are less risky than corporate bonds c. Government bonds are riskier than corporate bonds d. Corporate bonds have a longer maturity than government bonds
Do investors in high tax brackets or those in low tax brackets benefit more from tax-exempt...

Do investors in high tax brackets or those in low tax brackets benefit more from tax-exempt securities? Why? Do municipal bonds or corporate bonds offer a higher before-tax yield at a given point in time? Why? Which has the higher after-tax yield? If taxes did not exist, would Treasury bonds offer a higher or lower yield than municipal bonds with the same maturity? Why?

Investment grade rated countries (IG) have, typically, higher yields than high yield, HY, (AKA junk bonds...

Investment grade rated countries (IG) have, typically, higher yields than high yield, HY, (AKA junk bonds or speculative grade), since HY bonds' default probability is Lower than the IG's. Group of answer choices True False
A 5-year corporate bond yields 8.00%. A 5-year municipal bond of equal risk yields 6.50%. Assume...

A 5-year corporate bond yields 8.00%. A 5-year municipal bond of equal risk yields 6.50%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.) a. 15.56 b. 14.63 c. 21.56 d. 18.75 e. 20.06 please show work
Typically, the yield to maturity on corporate bonds will be ___________ the more restrictions are placed...

Typically, the yield to maturity on corporate bonds will be ___________ the more restrictions are placed on management through restrictive covenants, because ____________. a. higher; corporate earnings will be lower when a bond has restrictive covenants b. higher; the bond’s will be considered safer by investors c. lower; the bonds will be considered safer by investors d. lower; corporate earnings will be higher when a bond has restrictive covenants

Suppose that five-year AAA-rated municipal bonds were yielding 2.88% whereas five-year AAA-rated corporate bonds were yielding...

Suppose that five-year AAA-rated municipal bonds were yielding 2.88% whereas five-year AAA-rated corporate bonds were yielding 4.23%. Municipal bonds are typically tax-exempt at the federal level, whereas corporate bonds are fully taxable. The lower pre-tax return on municipal bonds is called: A. An explicit tax B. An implicit tax C. An outrageous tax D. An egregious tax E. An estate tax
A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield...

A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield to maturity of 7.24 percent. Which of these two bonds should an investor with a marginal tax rate of 28 percent buy? A. The corporate bond because it offers a higher after-tax yield to maturity. B. The corporate bond because its stated yield to maturity of 7.24 percent is higher than the municipal bond's stated yield to maturity of 5.08 percent. CC. The municipal...
Short Term municipal bonds currently offer yields of 4%, while taxable bonds pay 5%

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. zerob. 10%c. 20%d. 30%

Information: In September of 2016 it was reported that AAA rated corporate bonds with 20 years...

Information: In September of 2016 it was reported that AAA rated corporate bonds with 20 years to maturity were yielding 3.18%, while AAA rated municipal bonds of the same maturity yielded 2.57% Question: Based on this information what was the implied marginal tax bracket (break-even tax bracket) at the time for bonds of this maturity and risk level? If a County Water Reclamation District revenue bond yields 2.7%, what is its tax-equivalent yield for investors in the 28% tax bracket?