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You purchased a zero-coupon bond that has a face value of $1,000, sevcen years to maturityt and a yield to maturity of 6.3%. It is
You purchased a zero-coupon bond that has a face value of $1,000, sevcen years to maturityt and a yield to maturity of 6.3%. It is one year later and similar bonds are offering a yield to maturity of 9.1%. you will sell the bond now. You have a tax rate of 35% on regular income and 15% on capital gains. calculate the following for this bond.
b. current price of the bond
c. imputed interest income
d. the capital gain (or loss) on the bond.
f. the after tax rate of return on this investment
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