We want to buy a 30 year 5 bond but we plan to sell it in 4, Financial Management

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We want to buy a 30 year 5 bond but we plan to sell it in 4

We want to buy a 30 year, 5% bond, but we plan to sell it in 4 years. We estimate that the ytm at that time will be 7%. The market rates are 4% presently. What should we pay for the bond now? If this bond is a municipal one, what is the equivalent yield, if our tax rate is 40%? Use the market rate of now for the derivation.

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Financial Management: We want to buy a 30 year 5 bond but we plan to sell it in 4

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Financial Management: We want to buy a 30 year 5 bond but we plan to sell it in 4

Reference No:- TGS01278370

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