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Bond P is a premium bond with a coupon rate of 11 percent. Bond D has a coupon rate of 6 percent and is selling
Bond P is a premium bond with a coupon rate of 11 percent. Bond D has a coupon rate of 6 percent and is selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have six years to maturity.
What is the current yield for Bond P and Bond D? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) | |
b. | If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P and Bond D? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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