Question
Five years ago you purchased an A rated 5% semi-annual coupon bond with $1,000 par value that had 15 years left to maturity and priced
Five years ago you purchased an A rated 5% semi-annual coupon bond with $1,000 par value that had 15 years left to maturity and priced to yield 8%. Today the bonds rating has deteriorated to BB and the bond is priced to yield 12%. If you sell the bond at todays price, what is your capital gain or loss? (10 points)
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Contemporary Financial Management
Authors: Don Cyr, Alfred Kahl, William Rentz, R. Moyer
1st Edition
017616992X, 978-0176169923
