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(15 points) 4. You have the opportunity to buy a zero-coupon municipal bond that will pay you $1000 in three years. The current market yield to maturity on this bond is 4.7%. What price (S) should you pay for the bond today? What will the bond be worth a year from today assuming the market yield to maturity remains at 47%? What is your one-year holding period return over the year that you hold the zero-coupon municipal bond? Price today S Price year from today = $ HPR Given that you are in the 26 percent combined federal and state tax rate, what is your tax-equivalent yield on the bond? In other words, what rate would a zero coupon taxable bond need to yield before taxes if it were to have a 4.7 percent after-tax yield? Tax equivalent Yield =