PPT Slide

Zero Coupon Bond

0 1 2 3

12%

Accrued

Value 576.43 635.52 711.78 797.20

Interest 68.09 76.26 85.42

Call premium 39.86

Taxes (28%) -19.07 -21.35 -35.08

Cash flow -576.43 -19.07 -21.35 801.98

IRR = After tax YTC =9.45%.

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