Question 5 A fixed-interest loan stock bearing interest at a rate of 4% per annum payable half-yearly in arrears is issued by a company. The stock is to be redeemed at 110% on any coupon payment date from 10 to 15 years after issue, with the exact date of redemption at the discretion of the company. An investor, liable to income tax at 25% and capital gains tax at 40%, purchases the stock at outset at a price which gives a minimum net yield to redemption of 4% per annum effective after tax. Calculate the price per 100 nominal paid by the investor. [6 marks]