Required: a. Find the holding-period return for a one-year investment period if the bond is selling at a yield to maturity of 7.4% by the end of the yoar. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If you sell the bond after one year when its yield is 7.4%, what taxes will you owe if the tax rate on interest income is 40% and the thx 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.) c. What is the after-fax holding-period return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal c. What is the atter-tax holding-period return on the bond? (Do not round intermediate calculations, Round your answer to 2 decimal pinces.) the bond yleid is 7.4% at the end of the second yeag, and (iii) the coupon can be reimested for one year at a 3.4% 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 aftereax twoyear realized compound yield. Romomber to take account of OID tax rules. (Do not round intermediate calculations. Aound your answer to 2 decimal places.) Required: a. Find the holding-period return for a one-year investment period if the bond is selling at a yield to maturity of 7.4% by the end of the yoar. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If you sell the bond after one year when its yield is 7.4%, what taxes will you owe if the tax rate on interest income is 40% and the thx 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.) c. What is the after-fax holding-period return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal c. What is the atter-tax holding-period return on the bond? (Do not round intermediate calculations, Round your answer to 2 decimal pinces.) the bond yleid is 7.4% at the end of the second yeag, and (iii) the coupon can be reimested for one year at a 3.4% 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 aftereax twoyear realized compound yield. Romomber to take account of OID tax rules. (Do not round intermediate calculations. Aound your answer to 2 decimal places.)
