Question
A bond matures in 12 years and pays an 8 percent coupon rate paid semi-annually. The bond has a face value of $1,000, and currently
A bond matures in 12 years and pays an 8 percent coupon rate paid semi-annually. The bond has a face value of $1,000, and currently sells for $$1310.
a. What is the bonds current yield and yield to maturity?
b. If rates on bonds of similar risk and maturity fall to 5 %, what will be the price of the bond?
(with formulas)
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Contemporary Financial Management Fundamentals
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
1st Edition
0324015771, 9780324015775
