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You purchased a zero-coupon bond that has a face value of $1,000, five years to maturity and a yield to maturity of 7.3%. It is
You purchased a zero-coupon bond that has a face value of $1,000, five years to maturity and a yield to maturity of 7.3%. It is one year later and similar bonds are offering a yield to maturity of 8.1%. You will sell the bond now. You have a tax rate of 40% on regular income and 15% on capital gains. Calculate the following for this bond. 0 the purchase price of the bond 0 the current price of the bond 0 the imputed interest income a the capital gain (or loss) on the bond 0 the before-tax rate of return on this investment 0 the after-tax rate of return on this investment
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