Understanding Bond Pricing Suppose your friend tells you that she recently purchased a 15-year $7,000.00 bond with a 5% coupon. A month later, she saw it quoted at 95.250 , but she does not know what this means. You can tell by the way the bond is priced that she has You explein that the market price of her bond is now bond; otherwise it would have been priced , meaning it is now a bond. Based on the market price of the bond you calculated, you can tell that market interest rates have gone rield of the bond is now What does it mean to invest in stocks? Common stock is considered to be one of the most popular investment vehicles for long-term wealth building. Investors eam income from common stock in the form of dividends and/or capital gains. As an investor it is important to understand the implications of investing in stocks from a tax perspective. Calculating taxes owed on Bob's investment Two years ago, Bob purchased 100 shares of a particular company's stock at a price of $112.52 per share, Last year, Bob received an annual cividend of $1.90 per share, and at the end of the year, a share of stock was trading at $120,85 per share. This year, Bob received an annual cividend of $2.09 per share and at the end of the year sold all 100 shares at a price of $131.06 per share. In the first column of the foliowing table, enter the total annual dividends Bob received esch year, as well as the fotal capital gains at the end of each year. Suppose Bob is in the 32% tax brocket. Compute the taxes Bob pays each year on dividends and copital gains from this investment by campleting the second calumn in the table. Note: Throughout this problem, please round your answers to the nearest cent. The totel amoint of investment incoime (pre-taxns) that Bob eamed on this imestment over the cours of 2 yeacs is The total anoum that Dob yars in takes on income from this investment incoime is