Question: Consider a taxable security that offers a before tax yield of 8 percent. When converted into after tax terms , the yield will be reduced

Consider a taxable security that offers a before tax yield of 8 percent. When converted into after tax terms , the yield will be reduced by the tax percentage, The price after-tax yield is dependent on the tax rate T. Calculate after tax yield if the tax rate of the investor is 20 percent

Suppose that the three month T-bill's annualized rate is 8 percent and Elizbeth Company plans to issue 90-day commercial paper Assume that Elizabeth company believes that 0.7 percent default risk premium, a 0.2 percent liquidity premium and 0.3 percent tax adjustment is required to sell its commercial papers to investors. Calculate appropriate yield on commercial paper.

Assume that as of that today (time t). the annualized two year interest rate is 10 percent and the one- year interest rate is 8 percent
Calculate one year forward rate of interest

Assume that as of today, the annualized two year interest rate is 13 percent, while the one year interest rate is 12 percent
Use only this information to estimate the one-year forward rate.

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