Question
Iota Inc issued a 10 year $600 million face value bonds. The annual coupon rate of bond is 6%. Round the answer to 4 decimal
Iota Inc issued a 10 year $600 million face value bonds. The annual coupon rate of bond is 6%. Round the answer to 4 decimal places.
A.)Try to determine the market value when the bond issued, if it was priced to produce a yield (YTM) of 10% compounded annually on that date.
B.)Assume the bond is sold after 1 year, with an increase in the yield of 1% to 11% compounded annually on that date. Calculate the (i) Current yield (on issued date) (ii) 1-year Yield on capital gain/loss (iii) 1-year Holding period yield [Note: Round your final answer to two decimal places]
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