Question
Cosmos issued a new series of bonds on January 1, 1995. The bonds were sold at par ($1,000), had a 12% coupon, and mature in
Cosmos issued a new series of bonds on January 1, 1995. The bonds were sold at par ($1,000), had a 12% coupon, and mature in 30 years, on December 31, 2024. Coupon payments are made semiannually (on June 30 and December 31).
a) On July 1, 2018, 6.5 years before maturity, Cosmoss bonds sold for $916.42. What was the current yield at that time?
b) On July 1, 2018, 6.5 years before maturity, Cosmoss bonds sold for $916.42. What was the capital gains yield at that time?
c) On July 1, 2018, 6.5 years before maturity, Cosmoss bonds sold for $916.42. What was the total return at that time?
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