1. Fill out the table below. (40 points) The first three columns are inputs. P and CR are, respectively, the price and c

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1 Fill Out The Table Below 40 Points The First Three Columns Are Inputs P And Cr Are Respectively The Price And C 1 (194.83 KiB) Viewed 36 times

1. Fill out the table below. (40 points) The first three columns are inputs. P and CR are, respectively, the price and coupon rate of an annual 1.5-year coupon bond. TR is the marginal tax rate. The face value is $1,000. The last four columns are outputs. yp is the pretax yield. ya is the after-tax yield implied by the potentially-flawed formula. ya' is the after-tax yield assuming capital gains are only taxed at maturity and coupon payments are taxed normally. ya' is the after-tax yield assuming capital gains are only taxed at maturity and coupon payments are tax- exempt. I have already filled out the first row; it is the example we worked through in class. The goal for this exercise is to see how these yields change as the inputs change. P CR TR ya ya' ур 17.894% ya" 15.234% 10.736% 10.878% $900 $1,000 $900 $900 10% 10% 11% 10% 40% 40% 40% 44%