A year ago a corporation issued a 10 year bond with face value of $1,000 and coupon rate of 6.7% at par. today interest rates
A year ago a corporation issued a 10 year bond with face value of $1,000 and coupon rate of 6.7% at par. today interest rates have declined, causing the yield to maturity to drop by 1.31% versus the yield to maturity when the bond was issued last year. Calculate by what percentage the price of the bond has increased over the past year based on this decline in the yield-to-maturity.
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Step: 1
The price of the bond has increased by 925 percent over the past year As the bond was is...
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Step: 2
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Authors: Richard Brealey, Stewart Myers, Alan Marcus
8th edition
77861620, 978-0077861629
