Investor taxable income from the bond over the coming year

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Reference no: EM132008902

A newly issued 10-year maturity, 5% coupon bond making annual coupon payments is sold to the public at a price of $840. 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.)

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.)

Reference no: EM132008902

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