Suppose a bond with a face value of $1000 and coupons at 5% p.a. payable annually is
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Suppose a bond with a face value of $1000 and coupons at 5% p.a. payable annually is redeemable in 10 years at par. If an investor buys the bond for $950 and is subject to income tax at 35% on the coupons and capital gains tax at 20% on the profit on redemption, what is the gross and net yield on this transaction?
Related Book For
Basic Finance An Introduction to Financial Institutions Investments and Management
ISBN: 978-1111820633
10th edition
Authors: Herbert B. Mayo
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