What is the credit rating of the issuer of the bond? How is this credit rating reflected in the yield of the bond? If possible, quantify the credit spread.
Find the price of the bond. After one year, the bond is selling at a yield to maturity of 5.5%. Find the holding period return if you sell the bond after one year. If you sell the bond after one year, what taxes will you owe? Assume that the tax rate on interest income is 40% […]