Taxable income from the bond over the coming year

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Reference no: EM131815414

A newly issued 10-year maturity, 6% coupon bond making annual coupon payments is sold to the public at a price of $880. The bond will not be sold at the end of the year. The bond is treated as an original-issue discount bond.

a. Calculate the constant yield price. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Constant yield price $

b. What will be an investor's taxable income from the bond over the coming year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Taxable income $

Reference no: EM131815414

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