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Assume you have a 1-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature

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Assume you have a 1-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 10 years. The first is a zero-coupon bond that pays $1,000 at maturity. The second has an 8% coupon rate and pays the $80 coupon once per year. The third has a 10% coupon rate and pays the $100 coupon once per year. c. What is your before-tax holding-period return on each bond? (Round your answers to 2 decimal places.) Zero Coupon 17.43% 8% Coupon 0.00% 10% Coupon Pro-tax rate of retum d. If your tax bracket is 30% on ordinary income and 20% on capital gains Income, what will be the after-tax rate of return on each bond? (Round your answers to 2 decimal places.) Zero Coupon % 8% Coupon % 10% Coupon 1% After-tax rate of return Check my work $80 coupon once per year. The third has a 10% coupon rate and pays the $100 coupon once per year. a. If all three bonds are now priced to yield 8% to maturity, what are the prices of: C) the zero-coupon bond: (1) the 8% coupon bond: (1) the 10% coupon bond? (Round your answers to 2 decimal places.) Zero Coupon 8% Coupon 10% Coupon $ 463.19 $ 1,000.00 $ 1.134 20 Current prices b. If you expect their yields to maturity to be 8% pt the beginning of next year what will be the price of each bond? (Round your answers to 2 decimal places.) Price 1 year from now Zero Coupon 8% Coupon 10% Coupon $ 500.24 s 1,000.00 $ 1,124.94

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