Find the current yield and the capital gains yield for a 10-year, 9% annual coupon bond that sells for $800, and has a face value of $1,000.

c u r r e n t y i e l d r a t i o = A n n u a l c o u p o n p a y m e n t C u r r e n t p r i c e

Y T M = C u r r e n t y i e l d + C a p i t a l g a i n s y i e l d

Group of answer choices

Current yield: 11.25% ; Capital Gains yield: 2.38%

Current yield: 11.25% ; Capital Gains yield: 1.38%

Current yield: 12.15% ; Capital Gains yield: 0.76%

Current yield: 11.25% ; Capital Gains yield: 4.76%

Current yield: 13.15% ; Capital Gains yield: 3.76%

please show work

Assume Tom wants to earn a return of 10.50% and is offered the opportunity to purchase a $1,000 par value bond that pays an 8.75% coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the bonds intrinsic value:

I n s t r i n s i c v a l u e = A ( 1 + C ) 1 + A ( 1 + C ) 2 + A ( 1 + C ) 3 + A ( 1 + C ) 4 + A ( 1 + C ) 5 + A ( 1 + C ) 6 + B ( 1 + C ) 6

Group of answer choices

A= $43.75 ; B=$1,000 ; C=10.50%

A= $87.50 ; B=$1,000 ; C=10.50%

A= $43.75 ; B=$1,000 ; C=5.25%

A= $87.50 ; B=$1,000 ; C=5.25%

A= $87.50 ; B=$2,000 ; C=10.50%