Question
ABC bond is a $1,000 par bond with a coupon rate of 5% per year. It has a semi-annual coupon payment and two years until
ABC bond is a $1,000 par bond with a coupon rate of 5% per year. It has a semi-annual coupon payment and two years until maturity. The yield to maturity of a similar bond, calculated using the European method is 12%. If someone is trying to sell this ABC bond to you for $900 per share, as a US investor, should you buy this bond? You must show your calculation.
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Intermediate Accounting
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
10th Canadian Edition, Volume 1
978-1118735329, 9781118726327, 1118735323, 1118726324, 978-0176509736
