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Step by step solution needed to obtain the answers thanks :) A fixed interest stock with an optional redemption date at any time between 6
Step by step solution needed to obtain the answers thanks :)
A fixed interest stock with an optional redemption date at any time between 6 and 22 years from the date of isssue is redeemable at 109%. It pays coupons of 9.7% per annum in arrears. An investor, subject to 32% income tax and 25% capital gains tax, purchases at issue a 11,000 nominal of the bond and obtains a net effective yield of 6.3% per annum. Calculate, to 2 decimal places, the price paid by the investor. Answer: 11844.79 The correct answer is: 11615.82Step by Step Solution
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