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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. the purchase price of the bond the current price of the bond the imputed interest income the capital gain (or loss) on the bond the before-tax rate of return on this investment the after-tax rate of return on this investment
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