Question
A fixed-rate corporate bond issue has the following characteristics: A nominal coupon rate of 6% with semiannual coupon payments; an original maturity of 40 years;
A fixed-rate corporate bond issue has the following characteristics:
A nominal coupon rate of 6% with semiannual coupon payments; an original maturity of 40 years; and a face value of $1,000. 12 years after the issue date, market interest rates for comparable bond issues are 8%.
What is the current yield on this bond?
Group of answer choices
5.14%
7.89%
10.29%
7.71%
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Authors: Jack Jones
1st Edition
1545269920, 978-1545269923
