A 3.70 percent coupon municipal bond has 15 years left to maturity and has a price quote of 95.65. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and it has a par value of $5,000.) Compute the bond's current yield. Compute the yield to maturity. Compute the taxable equivalent yield (for an investor in the 30 percent marginal tax bracket). Compute the yield to call. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Current yield Yield to maturity % % Equivalent taxable yield % Yield to call %
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- A 4.00 percent coupon municipal bond has 12 years left to maturity and has a price quote of 95.55. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and it has a par value of $5,000.) Compute the bond's current yield. Compute the yield to maturity. Compute the taxable equivalent yield (for an investor in the 30 percent marginal tax bracket). Compute the yield to call.A 3.70 percent coupon municipal bond has 15 years left to maturity and has a price quote of 95.65. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the taxable equivalent yield (for an investor in the 30 percent marginal tax bracket).A 3.10 percent coupon municipal bond has 15 years left to maturity and has a price quote of 96.45. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and it has a par value of $5,000) Compute the bond's current yield. Compute the yield to maturity. Compute the taxable equivalent yield (for an investor in the 30 percent marginal tax bracket) Compute the yield to call. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Current yield Yield to maturity Equivalent taxable yield Yield to call. % % % %
- an individual is interested in a five year bond that pays a 6.8 percent coupon rate with interest to be received semiannually. the required rate of return is 8 percent. what is the most they would be willing to pay for this bond ? Assume face value is $1000.A 4.60 percent coupon municipal bond has 17 years left to maturity and has a price quote of 104.60. The bond can be called in eight years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the taxable equivalent yield (for an investor in the 36 percent marginal tax bracket). (Do not round intermediate calculations. Round your answer to 2 decimal places.)1. Calculate the price of a zero-coupon bond that matures in 12 years if the market interest rate is 6.05 percent. Assume semiannual compounding. 2. What’s the taxable equivalent yield on a municipal bond with a yield to maturity of 4.1 percent for an investor in the 28 percent marginal tax bracket? 3. Compute the price of a 5.9 percent coupon bond with 15 years left to maturity and a market interest rate of 7.0 percent. (Assume interest payments are semiannual.) 4. A 4.70 percent coupon bond with 15 years left to maturity is offered for sale at $953.91. What yield to maturity is the bond offering? (Assume interest payments are semiannual.) 5. A 5.10 percent coupon bond with 15 years left to maturity can be called in three years. The call premium is one year of coupon payments. It is offered for sale at $1,060.30. What is the yield to call of the bond? (Assume interest payments are semiannual.) (
- A newly issued bond pays its coupons once annually. Its coupon rate is 5.4%, its maturity is 20 years, and its yield to maturity is 12%. Required: Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 11% by the end of the year. 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. What is the after-tax holding-period return on the bond? Find the realized compound yield before taxes for a 2-year holding period, assuming that (i) you sell the bond after two years, (ii) the bond yield is 11% at the end of the second year, and (iii) the coupon can be reinvested for one year at a 3% interest rate. Use the tax rates in part (b) to compute the after-tax 2-year realized compound yield. Remember to take account of OID tax rules.An 3.10 percent coupon municipal bond has 15 years left to maturity and has a price quote of 96.45. The bond can be called in 4 years. The call premium is one year of coupon payments. Compute the Bond's yield to call and determine if the bond will be called. Assume interest payments are paid semi-annually and par value of $5,000. Compute the bond's current yield. Compute the yield to maturity. Compute the taxable equivalent yield (for an investor in the 30 percent marginal tax bracket).You wish to sell a bond that has a face valueof $5,000. The bond bears an interest rate of 7.5%,which is payable quarterly. Six years ago, the bondwas purchased at $4,800. At least a 9% annual returnon the investment is desired. What must be the minimum selling price of the bond now in order to makethe desired return on the investment?
- Carries Clothes, Inc. has a five -year bond outstanding that pays $60 annually. The face value of each bond is $1,000, and the bond sells for $890. Use semi- annual interest payments if it applies. What is the bond’s coupon rate? What is the current yield? What is the yield to maturity?A newly issued bond pays its coupons once annually. Its coupon rate is 5%, its maturity is 20 years, and its yield to maturity is 8%.a. Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 7% by the end of the year.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.c. What is the after-tax holding-period return on the bond?d. Find the realized compound yield before taxes for a 2-year holding period, assuming that (i) you sell the bond after two years, (ii) the bond yield is 7% at the end of the second year, and (iii) the coupon can be reinvested for one year at a 3% interest rate.e. Use the tax rates in part (b) to compute the after-tax 2-year realized compound yield. Remember to take account of OID tax rules.You are considering a 10-year, $1,000 par value bond. Its coupon rate is 9%,and interest is paid semiannually. If you require an “effective” annual interest rate (not a nominal rate) of 8.16%, how much should you be willing to pay for the bond?