Problem 6-18 Bond Yields [LO 2]

PK Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual payments and currently sell for 108.5 percent of par.

Requirement 1:

What is the current yield on PK's bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Current yield

________________ %

Requirement 2:

What is the YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Yield to maturity

_______________ %

Requirement 3:

What is the effective annual yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Effective annual yield__________________

%

PK Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual payments and currently sell for 108.5 percent of par. Requirement 1:What is the current yield on PK's bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)Current yield________________ % Requirement 2:What is the YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)Yield to maturity_______________ % Requirement 3:What is the effective annual yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)