6) A 10 year bond with face value F and with semiannual nominal coupon rate 5% is subject to a 6% tax (at maturity, i.e. after 10 years) on the amount of discount that the bond is bought at. If the after tax nominal semiannual yield rate is 6% and the after tax price at this yield rate is $9,200 then find the face value F.
6) A 10 year bond with face value F and with semiannual nominal coupon rate 5% is subject to a 6% tax (at maturity, i.e. after 10 years) on the amount of discount that the bond is bought at. If the after tax nominal semiannual yield rate is 6% and the after tax price at this yield rate is $9,200 then find the face value F.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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