A community for students.

Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing


  • 4 years ago

Hi all, i am trying to value Municipal bonds, because of their tax free nature do we adjust the discounting factor for the tax rate applicable ? i came across following formulae while searching online. P (pre tax discounting factor)= 1/(1+Z)^t d (after tax discounting factor)= P/(1-T(1-P)) where, Z=> spot rate of zero coupon bond for respective tenor T=> income tax rate Is after tax discounting factor mentioned above appropriate to use ? Thanks..

  • This Question is Closed

    Not the answer you are looking for?
    Search for more explanations.

    • Attachments:

Ask your own question

Sign Up
Find more explanations on OpenStudy
Privacy Policy

Your question is ready. Sign up for free to start getting answers.

spraguer (Moderator)
5 → View Detailed Profile

is replying to Can someone tell me what button the professor is hitting...


  • Teamwork 19 Teammate
  • Problem Solving 19 Hero
  • You have blocked this person.
  • ✔ You're a fan Checking fan status...

Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.

This is the testimonial you wrote.
You haven't written a testimonial for Owlfred.