Question
A general power bond carries a coupon rate of 8.8%, has 9 years until maturity, and sells at a yield to maturity of 7.8%. (
A general power bond carries a coupon rate of 8.8%, has 9 years until maturity, and sells at a yield to maturity of 7.8%. ( Assume annual interest payments).
a. What interest payments do bondholders receive each year?
$88
b At what price does the bond sell?
$1, 062. 99
c What will happen to the bond price if the yield to maturity falls to 6.8%?
Price will rise by?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
