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help please A newly issued bond pays its coupons once a year its coupon rate is 5 396, its rnaturity is 20 years, and its
help please
A newly issued bond pays its coupons once a year its coupon rate is 5 396, its rnaturity is 20 years, and its yield to maturity is 8 396. a Find the holding penod return for a one-year investment period if the bond is selling at a yield to maturity of 7.3% b the end of the year Do not round intermediate calculations. Round your answer to 2 decimal places.) Holding-period return | 1952|% b. If you sell the bond after one year when its yield is 73%, what taxes will you o ve t 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 ca c. What is the ater-tax holding-period return on the bond? (Do not round intermediate caiculations. 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 i you sell the bond after two years, i) the bond yield is 73% at the end of the second year, and? coupon can be reinvested for one year at a 3 3% interest rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.) e. Use the tax rates in part (b) to compute the after-tax two-year realized compound yield. Remember to take account of OID tax rules. (Do not round intermediate calculations. Round your ans to 2 decimal places.)Step by Step Solution
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