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On January 1 , 2 0 2 3 , ABC Corporation issued an 8 % annual coupon bond. Each unit of the bonds has $

On January 1,2023, ABC Corporation issued an 8% annual coupon bond. Each unit of the bonds has $1,000 par value and the bond will mature on January 1,2048. Suppose you bought 1 unit of ABC bonds at its issuance. a) On January 1,2034, how much did each unit of ABC bonds cost if the YTM is 12% on that date? (5 marks) b) Based on your purchase price on January 1,2034, what is the current yield of ABC bond? (2 marks) c) Today is the end of March 2035. Suppose immediately after receiving the coupon on January 1,2035, you sold the bond at 10% YTM. What was the capital gains yield of your bond investment from January 1,2034 to January 1,2035?

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