Question
Dynamic Systems has an outstanding bond that has a $1,000 par value and an 11 percent coupon rate. Interest is paid semiannually . The bond
Dynamic Systems has an outstanding bond that has a $1,000 par value and an 11 percent coupon rate. Interest is paid semiannually. The bond has 11 years remaining until it matures. Today the going interest rate is 12 percent, and it is expected to remain at this level for many years in the future.
a/ Compute the current yield. Do not round intermediate calculations. Round your answer to two decimal places.
b/ Compute the capital gains yield that the bond will generate this year. Do not round intermediate calculations. Round your answer to two decimal places.
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