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Kramerica Industries Inc. issued 25 year bonds 5 years ago. The bonds offer an 8.2% annual coupon rate. Currently, the bonds sell at a price
Kramerica Industries Inc. issued 25 year bonds 5 years ago. The bonds offer an 8.2% annual coupon rate. Currently, the bonds sell at a price of $925.
- Assuming semi-annual coupon payments, what is this bond's yield to maturity (YTM)?
- Suppose the YTM increases by 1% in 1 year, what is the new price of Kramericas bonds?
- And what is the percentage change as a result in this YTM change?
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The New Public Finance
Authors: Inge Kaul, Pedro Condeicao
1st Edition
0195179978, 978-0195179972
