One year ago, Henderson Honey issued a 10-year bond for $1,000. The bonds coupon rate of interest

Question:

One year ago, Henderson Honey issued a 10-year bond for $1,000. The bond’s coupon rate of interest is 4 percent, and interest is paid annually. If the current value of the bond is $929, what are

(a) The current yield and capital gains yield Henderson’s bondholders earned during the year

(b) The bond’s yield to maturity today.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...

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