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Company X has non-callable bonds outstanding. When originally issued, the bonds sold for $980 per bond; today (January 1) their current market price is $1,045
Company X has non-callable bonds outstanding. When originally issued, the bonds sold for $980 per bond; today (January 1) their current market price is $1,045 per bond. The company pays a semiannual interest payment of $30 per bond on June 30 and December 31 each year. If the bonds are perpetual bonds, a) What is the implied semiannual yield on these bonds as of today? b) What are the nominal annual yield and the effective annual yield on these bonds? If the bonds have a $1,000 par value and mature in 10 years, c) What is the implied semiannual yield to maturity (YTM) on these bonds? d) What are the nominal annual YTM and the effective annual YTM on these bonds
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