An investor purchases a 30-year U.S. government bond for $1,020. The bond's coupon rate is 9 percent and, it still had 14 years remaining until maturity. If the investor holds the bond until it matures and collects the $1000 par value from the Treasury and his marginal tax rate is 39 percent (we assume that the bond is taxable), what will be his after-tax (effective) yield to maturity?
An investor purchases a 30-year U.S. government bond for $1,020. The bond's coupon rate is 9 percent and, it still had 14 years remaining until maturity. If the investor holds the bond until it matures and collects the $1000 par value from the Treasury and his marginal tax rate is 39 percent (we assume that the bond is taxable), what will be his after-tax (effective) yield to maturity?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 17P
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An investor purchases a 30-year U.S. government bond for $1,020. The bond's coupon rate is 9 percent and, it still had 14 years remaining until maturity. If the investor holds the bond until it matures and collects the $1000 par value from the Treasury and his marginal tax rate is 39 percent (we assume that the bond is taxable), what will be his after-tax (effective) yield to maturity?
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