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consider a newly issued 6 % coupon bond with 1 5 years until maturity. The face value is $ 1 0 0 0 . The

consider a newly issued 6% coupon bond with 15 years until maturity. The face value is $1000. The coupons are paid once per year and the bond's yield to maturity is 9%. The yield to maturity of the bond changes to 8.5% by the end of the year. Suppose the interest income tax rate is 38% and the tax rate on capital gains is 20%. The bond is subject to the original issue discount treatment. IF you sell the bond after 1 year, how much taxes will you owe in total?

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