A newly issued bond pays its coupons once a year. Its coupon rate is 4.7%, its maturity is 15 years, and its yield to maturity is 7.7% a. Find the holding period return for a one-year investment period if the bond is selling at a yield to maturity of 6.7% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Holding-period return b. If you sell the bond after one year when its yield is 6.7%, 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.) Tax on interest income Tax on capital gain Total taxes c. What is the after-tax holding period return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) After-tax holding-period return d. Find the realized compound yield before taxes for a two-year holding period, assuming that (1) you sell the bond after two years, (ii) the bond yield is 6.7% at the end of the second year, and (iii) the coupon can be reinvested for one year at a 2.7% interest rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Realized compound yield before taxes e. Use the tax rates in part (b) to compute the after-tax two-year realized compound yield. Remember to fake account of OID tax rules. (Do not round intermediate calculations. Round your answert decimal places.) After-tax two-year realized compound yield References eBook & Resources