Herry is planning to purchase a Treasury bond with a coupon rate of 2.38% and face value of $100. The maturity date of the bond is 15 March 2033. (c) If Henry purchased this bond on 4 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.3% p.a. compounded half-yearly. Henry needs to pay 27.8% on coupon payment and capital gain as tax payment. Assume that all tax payments are paid immediately. a. 66.0182 O b. 80.6553 O c. 91.4031 d. 79.6067

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
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question
Herry is planning to purchase a Treasury bond with a coupon rate of 2.38% and face value of $100. The maturity date of the bond is 15 March 2033.
(c) If Henry purchased this bond on 4 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.3% p.a. compounded half-yearly. Henry needs to pay 27.8% on
coupon payment and capital gain as tax payment. Assume that all tax payments are paid immediately.
a. 66.0182
O b. 80.6553
O c. 91.4031
d. 79.6067
Transcribed Image Text:Herry is planning to purchase a Treasury bond with a coupon rate of 2.38% and face value of $100. The maturity date of the bond is 15 March 2033. (c) If Henry purchased this bond on 4 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.3% p.a. compounded half-yearly. Henry needs to pay 27.8% on coupon payment and capital gain as tax payment. Assume that all tax payments are paid immediately. a. 66.0182 O b. 80.6553 O c. 91.4031 d. 79.6067
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education