Recently, April purchased a bond for $23,150 that pays a 6%…
Recently, April purchased a bond for $23,150 that pays a 6% coupon, payable quarterly. The bond matures in 6 years at a par value of $25,000. She can reinvest the quarterly coupon at 4% compounded annually. Her salary is $73,000 per year. Her marginal tax rate is 40%, which is also the applicable tax rate on interest income. The tax rate on dividend income is 22% and the tax rate on capital gain income is 20%. How much coupon income will April receive each quarter? _______ How much coupon income will April receive over 6 years? _______ What is her HPR before-tax if she does not reinvest her investment income? Write your asnwer as a percentage and round your answer to 4 decimals. _______ What is her ANNUALIZED HPR before-tax if she does not reinvest her investment income? Write your asnwer as a percentage and round your answer to 4 decimals. _______ If she reinvests her investment income, how much will it be worth at the end of the 6 years? Round your answer to 2 decimals. _______ What is her HPR before-tax when she reinvests her investment income? Write your asnwer as a percentage and round your answer to 4 decimals. _______ What is her ANNUALIZED HPR before-tax when she reinvests her investment income? Write your asnwer as a percentage and round your answer to 4 decimals. _______ What is her ANNUALIZED HPR after-tax if she reinvests her investment income and taxes are paid annually? Write your asnwer as a percentage and round your answer to 4 decimals. _______