Question
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 10%. a. What is the yield to maturity at a current market price of 1. $842? Round your answer to two decimal places. % 2. $1,157? Round your answer to two decimal places. % b. Would you pay $842 for each bond if you thought that a "fair" market interest rate for such bonds was 14%-that is, if ra = 14%?
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
4th Edition
1439078084, 978-1439078082
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