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Ms. Pay, who has a 40.8 percent marginal tax rate on interest income ( 37 percent income tax +3.8 percent Medicare contribution tax), owns HHL

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Ms. Pay, who has a 40.8 percent marginal tax rate on interest income ( 37 percent income tax +3.8 percent Medicare contribution tax), owns HHL corporate bonds in her investment portfolio. She earned $64,800 interest this year on her HHL bonds. Required: a. Compute her after-tax cash flow assuming that she received two semiannual cash payments of $32,400 each. b. Compute her after-tax cash flow assuming that she instructed HHL to reinvest her interest payments in additional bonds. c. Compute her after-tax cash flow assuming that the entire $64,800 represented amortization of OID

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