Declare the implicit interest for tax purposes

Assignment Help Financial Management

Reference no: EM131081702

PomPom Co. recently issued a $1,000 face, 20 year zero coupon bond. The initial offering sold in January, 2000 for $350. Despite the fact that the bond doesn’t pay interest, the IRS says you must declare the implicit interest for tax purposes. What is the implicit interest for this bond in year 15?

A. $18.90

B. $21.25

C. $39.34

D. $19.90

E. $40.26

Reference no: EM131081702

Questions Cloud

Payoff diagram for the position as function of stock price : Consider a trading position in options which involves: i. A long position in a call with a strike price of X=70 and a call premium c=10 ii. A short position in a put with a strike price of X=70 and a call premium p=10 Both options have the same under..

Which body system will be impacted by the diseases : Identify two diseases that could result from factors or actions you examined above. Which body system(s) will be impacted by the diseases? Briefly analyze two effects human activity and lifestyle habits have on our environment (air quality, food ..

What is the value of the constant c : What is the value of the constant c?

Stays at that price until the option expires : You have a short position in a put option on Apple Inc. common stock. The option has an exercise price of $122 and the stock is currently trading at $124.70. The option premium is $3.60 per contract. What is your net profit/loss if Apple Inc. stock p..

Declare the implicit interest for tax purposes : PomPom Co. recently issued a $1,000 face, 20 year zero coupon bond. The initial offering sold in January, 2000 for $350. Despite the fact that the bond doesn’t pay interest, the IRS says you must declare the implicit interest for tax purposes. What i..

Find the pmf of y the number of points scored in a 1 : Find the PMF of Y, the number of points scored in a 1

How much interest will you pay to the bank during year : You borrowed $200,000 from a bank to buy a house at 4.5% interest for 30 years with monthly payments. How much do you need to pay every month? And how much interest will you pay to the bank during year 10 only?

Pay inequality for women in construction business in texas : Using those experiences and feedback, you will develop a final proposal for a hypothetical study. Specifically, for this assignment, you are asked to develop an expanded proposal that incorporates the feedback you have received as well as your ow..

What was the stock price per share : What was the stock price per share of General Motors common stock at year end 2016? How did this compare to basic earnings per share? Would you invest (buy stock) in General Motors? Why or why not?

User Account

All Pages