You buy a 9-year $1,000 par value 5.00% annual-payment coupon bond priced to yield 7.00%. You do not sell the bond at year-end. If you are in a 15% tax bracket at year-end you will owe taxes on this investment equal to
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- You buy a 10-year $1,000 par value 4.60% annual-payment coupon bond priced to yield 6.60%. You do not sell the bond at year- end. If you are in a 15% tax bracket, at year-end you will owe taxes on this investment equal to Multiple Choice $9.90 $5.32 $8.48How much would you be willing to pay for a $1,000 par value, 10-year bond with a 12.00% coupon that's paid semi-annually, if your required rate of return is 10.58%? Select one: a $1,124.62 b. $1,000.00 c. $1,086.35 d. $1,000.00 e. $957.50To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00? Ans. P 959.45 You purchased a P 500 bond for P 5,100.00. The bond pays 200 per year. It is redeemable for P 5,050 after 10 years. What is the net rate of interest on your investment? Ans. 3.486%
- If you buy municipal bond (tax free) that cost $1,000 and will pay a 4.7% coupon every year for the next 10 years (so the maturity date is in 10 years). At maturity the bond returns the original $1,000. If there is a 2.5% annual inflation, a) what real rate of return will you receive? b) How much real $ profit did you make from the bond?You buy an 8-year, 3.30% annual - payment coupon bond priced to yield 5.30 %. You sell the bond at year - end, immediately after receiving the first coupon payment. Assuming the YTM stayed constant over the holding period, what are your capital gains from the sale of the bond? A. -0.09 B. -0.02 C. 0.02 D. 0.09A newly issued bond pays annual coupons. Coupon rate 5%, maturity 20-year and YTM 8%. Suppose rate drop to 7% after one year. Calculate after-tax return if you sell the bond after one year. Capital gain tax 30% and ordinary income tax 40%. The bond is subject to the OID tax treatment A. 12.00% B.13.00% C.14.25% D.15.52%
- You buy a zero couponbond at the beginning of the year that has a face value of $1,000, a YTM of 7 percent,and 25 years to maturity.If you hold the bond for the entire year, how much in interest income will you have to declare on your tax return? without excel please manuallyYou bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,100. The bond pays interest annually. If your marginal tax rate is 30%, and 50% of capital gains are taxable, what is the after-tax rate of return on your bond investment?Last year you purchased a 15 year bond at 98 with a coupon rate of 5%. The current market rate is 3%. If you sold your bond today, what would be your total return on your investment (ignore taxes)? View keyboard shortcuts Paragraph
- You buy a zero coupon bond at the beginning of the year that has a face value of $1,000, a YTM of 10 percent, and 14 years to maturity. You hold the bond for the entire year. Assume semiannual compounding. How much interest income will you have to declare on your tax return? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)You purchase a 6% $1,000 bond with a term of 5 years and reinvest all interest payments. If interest rates rise to 9% after you purchase the bond, what is the return on your investment in the bond? Assume annual payments/compounding. 6.33% 6.69% 9.00% 6.45%You can invest in taxable bonds that are paying a yield of 9.4 percent or a municipal bond paying a yield of 7.65 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16)) b. Which security bond should you buy? a b. Rate of return The security bond one should buy is %