6. Yield to Maturity and Required Returns

The Brownstone Corporation bonds have 5 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value; and the coupon interest rate is 9%.

a. What is the yield to maturity at a current market price of (1) $829 or (2) $1,104?

	(1) I/YR = %
	(2) I/YR = %

b. Would you pay $829 for one of these bonds if you thought that the appropriate rate of interest was 12%that is, if rdrd = 12%?

Yes

No

Please use financial calculator calculations when presenting answer. :)