Peter wants to buy a 3-year, AA-rated, $1000 par value, zero-coupon bond being sold by Stark Industries.

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Peter wants to buy a 3-year, AA-rated, $1000 par value, zero-coupon bond being sold by Stark Industries. The yield to maturity on the bonds is estimated to be 8% and bond is semiannual bond.

A) How much would he have to pay for it?

B) How much will he be taxed on the investment after 2 year, if his marginal tax rate is 20%?

Related Book For answer-question

Mathematical Applications for the Management Life and Social Sciences

ISBN: 978-1305108042

11th edition

Authors: Ronald J. Harshbarger, James J. Reynolds

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Posted Date: Dec 10, 2020 07:15 AM

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Peter wants to buy a 3-year, AA-rated, $1000 par value, zero-coupon bond being sold by Stark Industries.

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Answer to A Price of the ond 790314525730146 rounded to 2 decimal places is 79031 Price of Zero Coup... View the full answer

Mathematical Applications for the Management Life and Social Sciences

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