A zero coupon bond has a par value of $10,000 and a current price of $5,500. If the bond has 7 years to maturity, what is its after-tax yield to maturity for an investor paying 25% taxes? Use semiannual analysis. (Enter answer as a percentage to two decimals with no % sign)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A zero coupon bond has a par value of $10,000 and a current price of $5,500. If the bond has 7 years to maturity, what is its
after-tax yield to maturity for an investor paying 25% taxes? Use semiannual analysis. (Enter answer as a percentage to two
decimals with no % sign)
Transcribed Image Text:A zero coupon bond has a par value of $10,000 and a current price of $5,500. If the bond has 7 years to maturity, what is its after-tax yield to maturity for an investor paying 25% taxes? Use semiannual analysis. (Enter answer as a percentage to two decimals with no % sign)
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