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A Zero Coupon Bond Has a Yield to Maturity of 8%;

question 30

Multiple Choice

A zero coupon bond has a yield to maturity of 8%; what is the bond's taxable capital gain in last year of the bonds existence?


Definitions:

Price-Earnings Ratio

A valuation metric that measures a company's current share price relative to its per-share earnings, indicating investor expectations.

Net Income

The amount of profit a company generates after deducting all its costs, expenses, taxes, and interest from its total revenue.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Payout Ratio

A financial metric indicating the percentage of earnings paid to shareholders in the form of dividends, reflecting a company's dividend sustainability.

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