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DIY Plumbing's outstanding bond matures in five years. It has a coupon rate of interest equal to 3.2 percent (paid semiannually) and a maturity value
DIY Plumbing's outstanding bond matures in five years. It has a coupon rate of interest equal to 3.2 percent (paid semiannually) and a maturity value equal to $ 1,000. Stephan is deciding whether to purchase DIY's bond, which has a current market value of $1,023.24 If he buys the bond, what (a) current yield and (b) capital gains yield will he earn this year? Assume the market yield does not change during the year. (LO 6-5 )
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