Question
1- Oak Bay Software has 11.0% coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for
1- Oak Bay Software has 11.0% coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for 108.6% of par.
What is the YTM? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
YTM %
What is the effective annual yield? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
2-
The Metchosin Corporation has two different bonds currently outstanding. Bond M has a face value of $40,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $1,500 every six months over the subsequent eight years, and finally pays $1,800 every six months over the last six years. Bond N also has a face value of $40,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 12% compounded semiannually, what is the current price of bond M and bond N? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Current Price | |
Bond M | $ |
Bond N | $ |
Effective annual yield %
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