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Peabody Corp. has seven-year bonds outstanding. The bonds pay a coupon of 9.01 percent semiannually and are currently worth $1,055. The bonds can be called

Peabody Corp. has seven-year bonds outstanding. The bonds pay a coupon of 9.01 percent semiannually and are currently worth $1,055. The bonds can be called in three years at a price of $1,064. Assume the bonds were purchased at their par value. (Round intermediate calculations to 2 decimal places, e.g. 1.25 and final answer to 2 decimal places, e.g. 15.25%.)

a. What is the yield to maturity of these bonds? Yield to maturity % __________

b. What is the effective annual yield? Effective annual yield % _________

c. What is the realized yield on the bonds if they are called? Realized rate of return %

d. If you plan to invest in one of these bonds today, what is the expected yield on the investment? Expected yield % ____________

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