Question: need help with part e A newly issued bond pays Its coupons once annually. Its coupon rate is 8%, its maturity is 20 years, and

need help with part e
A newly issued bond pays Its coupons once annually. Its coupon rate is 8%, its maturity is 20 years, and its yield to maturity is 10%. a. Find the holding period return for a year investment period if the bond is selling at a yield to maturity of 9% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places. Answer is complete and correct. Holding period Resum 19.30 b. If you sell the bond after one year, what taxes will you owe if the tax rate on interest income is 40% and the tax rate on capital gains income is 30%? The bond is subject to original Issue discount tax treatment. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Answer is complete and correct. IS 32.19 Tax or interest income Tax on capital gain Total taxes IS IS 22.34 56.52 c. What is the after tax holding period return on the bond? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. After-tax holding period retum 12.50 d. Find the realized compound yield before taxes for a 2 year holding period, assuming that (t) you sell the bond after two years. (2 the bond yields 9% at the end of the second year, and (3) the coupon can be reinvested for one year at a 3% interest rate. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Realized compound yield before 13.00 % c. Use the tax rates in (b) above to compute the after fax 2 year realized compound yield. Remember to take account of OID tax rules. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Artax 2-year realized compound yield 13.82
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