Suppose you bought a bond from Apple Inc. for $100 in 2009, in 2019 you sold it

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Suppose you bought a bond from Apple Inc. for $100 in 2009, in 2019 you sold it at $400. 100%

inflation and your capital gain is taxed at a rate of 40%.

1). What is the pre-tax return?

2). What is the after tax rate?

the answer is 1). 100% and 2). 40%

could someone tell me how to get to these two answers?

Related Book For answer-question

Corporate Finance Core Principles and Applications

ISBN: 978-0077905200

3rd edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford

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Posted Date: Mar 01, 2024 07:36 AM

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Suppose you bought a bond from Apple Inc. for $100 in 2009, in 2019 you sold it

Question:

Expert Answer:

Sure lets break down the calculation step by step 1 Pretax Return The pretax return is s... View the full answer

Corporate Finance Core Principles and Applications

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