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A newly issued bond pays its coupons once a year. Its coupon rate is 4.9%, its maturity is 10 years, and its yield to maturity

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A newly issued bond pays its coupons once a year. Its coupon rate is 4.9%, its maturity is 10 years, and its yield to maturity is 79% a. Find the holding period return for a one-year investment period if the bond is selling at a yield to maturity of 6.9% 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 6.9% 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 retum d. Find the realized compound yield before taxes for a two-year holding period, assuming that (1) you sell the bond after two years ) the bond yield is 6.9% at the end of the second year, and (i) the coupon can be roinvested for one year at a 2.9% 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 allontax two-year realzed compound yold Remember to take account of OID tax rules (Do not round Intermediate calculations. Round your answer to 2 decimal places)

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