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Pelzer Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have a 7% annual coupon rate and were issued 1 year
Pelzer Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have a 7% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $810.40. The capital gains yield last year was -18.96%.
What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.
%
For the coming year, what are the expected current and capital gains yields? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places.
Expected current yield: __ %
Expected capital gains yield: __%
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