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Hooper Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have an 7% annual coupon rate and were issued 1
Hooper Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have an 7% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $810.40. The capital gains yield last year was 10.96 %. a. What is the yield to maturity? Round your answer to two decimal places. b. For the coming year, what is the expected current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. For the coming year, what is the expected capital gains yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places.
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