Herry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033. (c) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment and capital gain as tax payment. Assume that all tax payments are paid immediately. a. 80.4159 b. 66.0589 c. 91.9673 d. 81.4149

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
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Herry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033.
(c) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment and
capital gain as tax payment. Assume that all tax payments are paid immediately.
a. 80.4159
b. 66.0589
c. 91.9673
d. 81.4149
Transcribed Image Text:Herry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033. (c) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment and capital gain as tax payment. Assume that all tax payments are paid immediately. a. 80.4159 b. 66.0589 c. 91.9673 d. 81.4149
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