On January 1, 2003, you bought a 25-year bond of a Rogers Corporation. The Yield to Maturity at the time of purchase was 8.4%. The bond had a face value of $1,000 and carried a 6% quarterly coupon. Coupon interests are set for payments on the last day of each calendar quarter – Mar 31, June 30, Sept 30, and Dec 31 of every year.

On July 1, 2008, soon after paying the coupon interest due June 30, 2018, Rogers declared bankruptcy, and as part of the bankruptcy arrangement, the bond was renegotiated as follows.

• Beginning immediately, no interest will be paid for the next 6 years.
• Afterwards, interest will be paid at 30% of the original coupon interest for the next 4 years.
• Afterwards, the original interest will be paid for the reminder of the original term.
• Face Value will remain at $1,000.

Determine the following.

• Assuming you still own that bond until maturity and assuming there are no surprises in the future, what would be the true yield earned by you for the bond that you purchased on 1/1/2003.
• On the day of bankruptcy declaration, soon after the announcement, the yield on the bond is 13.4%. What was the bond trading on 7/1/2008?
• Assuming you sold the bond on 7/1/2008 for that market price (ignore commission) what would be your Holding Period Yield (HPY)?

(Answer using the CFj function, show calculator inputs)