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A newly issued bond pays its coupons once a year, its coupon rate is 54%, ts maturity Is 15 years, and its yeld to maturity

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A newly issued bond pays its coupons once a year, its coupon rate is 54%, ts maturity Is 15 years, and its yeld to maturity Is 84% Findthe holding penod return for a one year Investment period if the bond is seling at a yield to maturity of 74% by the end of the year (Do not round Intermedlate calculations. Round your answer to 2 declmal places.) 3 Answer is complete but not entirely correct. iod 110 9501% 1 b-if you sell the bond after one year when its yield is 74%, what taxes will you owe if the tax rate on interest income is 40% and the tax rate on capital gains income is 30%? The bond is subject to original-issue discount (OID) tax treatment" (Do not round Intermediate calculations. Round your answers to 2 decimal places.) 3 Answer is complete but not entirely correct. 28 28 16.88 1e realzed compound yield before taxes for a two-year holding period, assuming that O you sell the bond after two years. 00 the bond yield is 74% at the end or the second year and @) the coupon can be reinvested for one year at a 3.4% interest rate. (Do not round Intermedlate celculations. Round your answer to 2 decimal places.) b) to compute the ater-tex two-year realized compound yield. Remember to take account of OID tax rules e. Use the tax rates in part (b) to compute the after-tax (Do not round Iintermediate calculations. Round your answer to 2 declmal places.)

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