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Can you please explain to me how we came up with these answers ? Thanks in advance 6 Redeye Hydro Inc has issued a 10-year
Can you please explain to me how we came up with these answers ? Thanks in advance
6 Redeye Hydro Inc has issued a 10-year bond. The bond has a 9% coupon rate with annual coupon payments. The bond is currently trading at a price of $980 and has a face value of $1000. a. What is the bond's yield to maturity? Answer in percentage form with two decimals (i.e. 10.04%, not 0.1004). * (9.32)% b. What is the bond's yield to maturity if instead the coupon payments were made semiannually and the annual coupon rate was still 9%? Answer in yearly format and in percentage form with two decimals (i.e. 10.04%, not 0.1004). * (9.31) % c. Now ignore you answers in a) and b) and assume instead that the bond has a yield to maturity of 10% APR and make semiannual coupon payments. The Face Value is still $1000, the annual coupon rate is still 9%, and the time to maturity is still 10 years. What would the new price of this bond be? Answer in dollar amount with two decimals (i.e. 1001.23). $ * (937.69)Step by Step Solution
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