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According to the IRS Amortization Rule, the interest deduction on a zero coupon bond is...

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Finance

According to the IRS Amortization Rule, the interest deduction on a zero coupon bond is the increase in market price during the year. Using this IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In other words, what is the increase in market price during the first year of a zero coupon bond that has a $1000 face value, 14.55% yield-to-maturity, and matures in 14 years (assume semiannual compounding)? O a. $22.26 O b. $21.43 Oc. $131.03 O d. $21.70 O e. $21.11
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According to the IRS Amortization Rule, the interest deduction on a zero coupon bond is the increase in market price durind the year. Using this IRS amortization rule, what interest deduction can the company take on these bonds in the fixst year? in other words, what is the increase in market price during the first year of a zero coupon bond that has a s10oo face valus, 14.55% yield-to-maturity, and matures in 14 years (assume semiannual compounding)? a. $22.26 b. $21,43 c. $131.03 d. $21.70 e. $21.11

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