a r e a 9-4: Bond Yields 9-6: Bonds with Semiannual Coupons Current yield, capital gains yield, and yield to matunity Hooper Printing Inc. has bonds outstanding with 9 years left to maturky. The rates, the bond's market price has fallen to $917.30. The capital gains yield last year was 8.27% a. What is the yield to maturity? Round your answer to two decimal places bonds have an 8% annual coupon rate and ere issued 1 year ago at their par value of $1,000. However, due to changes in interes at ther par value For the coming year, what is the definition of the current yield and to Table 7.1.) Round your answer to two decimal places year, what is the expected capital gains yield?(hint: Refer to Fostnote 7 for the definition of the current yield and to T c. Will the actual realized yields be equal to the expected yields if interest rates change? It not, how wll they atter? nge they will cause the end-of-year price to change and thus the realized capital g yield to change. As a result, the realhzed return to investors wi differ from the YTM t chargng interestweer, changing races will couse the price to change and as a result, the realianed return to investors will differ from the YTM 111. As long as promised Homrwer, changing rates will cause the price to change and as a resut, the realized coupon payments are made, the current yield will not change as a resuit of changing cerest rates coupon payments are made, the current yield well change as a resalt of changng interest rotes However, changing rates will cause n to investors should equal the YTM. return to investors should equal the YTM return to investors should equal the YIM IV. As long as promised the price to change and as a result, the reakzed V. As long as promised coupon payments are made, the current vield will change as a result of c hanging interest rates, er, changing rates wil not cause the price to change and as a result, the realzed r i Current yield, capital gains yield, and yield to maturity Hooper Printing Inc. has bonds outstanding with 9 years left to rates, the bond's market price has fallen to $917.30. The capital gains a. What is the yield to matunity? Round your answer to two decimal places maturity. The bonds have an 8% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in inte yield last year was b. for the coming year, what is the expected current yield? (Hint: (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal for the definition of For the coming year, what is the expected capital giins yeld? (Hint: R Refer to Footnote 7 for the delfinition of the current vield and to Table 7.1.) Round your answer to two decimal places c h wil the actual real zed yells be equal to the expected yields f interest rates change, not how will the iren 1. As rates change they will cause the end of-year price to change and thus the realized capital gains yield to change. As a Il. As long as promised coupon payments are made, t s the realized capital gains yield to change. As a result, the realized return to investors will differ from the YTM Honever, changing rates will cause the price to change and as a result, the realzed changing rates will cause the price to change and as a result, the reak the current yield will change as a result of changing interest rates return to investors will dffer from the YTM return to investors should equal the YTM return to investors should equal the YTM return to investors should equal the YIM payments are made, the current yield will not change as a result of changing interest rates. However, c II1. As long as promised coupon p IV. As long as promised coupon payments are made, the orrent yield will change as a result of changing interest V. As long as promised coupon payments are made, the current yeld will change as a result of changing i rates Homever, changing rates wll cause the price to change and as a nterest rates. However, changing rates will not cause the price to change and as a result, the real 9-4: Bond Yields 9.6:Bonds with Semianeual Coupons Current yield, capital gains yield, and yield to maturity Hooper Printing Inc. has bonds outstanding with 9 years le t to maturity The bonds have an 8% annual coupon rate and were issued 1 year ago at ther par val e of SI rates, the bond's market price has fallen to $917.30. The Capital gains yield last year was . 8.27%. a. What is the yield to maturity? Round your answer to two decimal places However, due to changes in interest b. For the coming year, what is the expected curment yield? (Hint: Refer to Footnate 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places for the coming year, what the expected capital gains yield? (Hint: Refer to footnote 7 for the definition of the current yeld and to Tatie 7,1.) Round your answer to two decrnal places. c. Wil the actual realized yields be equal to the expected yields if interest rates change? If not, how will they difer? 1. As rates change they will cause the end-of-year price to change and thus the reaized capital gains yield to change. As a resut, the realzed return to investors will differ from the YTM 1. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates wil cause the price to change and as a result, the realized 1. As long as promised coupon payments are made, the current yield will not change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized IV. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates wil cause the price to change and as a result, the realized v. As long as promised coupon payments are made, the current yield wal change as a result of chatgng interest rates However, changng rates wil not cause the price to change and as a result the realized return to investors will defer from the YTM. return to investors should equal the YTM return to investors should equal the YTM. return to investors should equal the YTM