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A fixed interest stock pays an annual coupon of 9.1% per annum 4 monthly in arrears and is redeemed at 95% at any time between 6 and 15 years from the date of isssue at the option of the borrower. Calculate, to 2 decimal places, the ex-dividend price (per £350,000 nominal) 1 month before the first coupon payment that should be paid by an investor requiring a net redemption yield of 6.2% per annum effective. Assume that the investor is subject to income tax at a rate of 23%. Answer:

A fixed interest stock pays an annual coupon of 9.1% per annum 4 monthly in arrears and is redeemed at 95% at any time between 6 and 15 years from the date of isssue at the option of the borrower. Calculate, to 2 decimal places, the ex-dividend price (per £350,000 nominal) 1 month before the first coupon payment that should be paid by an investor requiring a net redemption yield of 6.2% per annum effective. Assume that the investor is subject to income tax at a rate of 23%. Answer:

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 17P
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Qu A fixed interest stock pays an annual coupon of 9.1% per annum 4 monthly in arrears and is redeemed at 95% at any time between 6 and 15 years from the date of isssue at the option of the borrower. Calculate, to 2 decimal places, the ex-dividend price (per £350,000 nominal) 1 month before the first coupon payment that should be paid by an investor requiring a net redemption yield of 6.2% per annum Fini effective. Tim Assume that the investor is subject to income tax at a rate of 23%. Answer:
Transcribed Image Text:Qu A fixed interest stock pays an annual coupon of 9.1% per annum 4 monthly in arrears and is redeemed at 95% at any time between 6 and 15 years from the date of isssue at the option of the borrower. Calculate, to 2 decimal places, the ex-dividend price (per £350,000 nominal) 1 month before the first coupon payment that should be paid by an investor requiring a net redemption yield of 6.2% per annum Fini effective. Tim Assume that the investor is subject to income tax at a rate of 23%. Answer:
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