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Problem 7-1 Bond valuation Callaghan Motors' bonds have 25 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon
Problem 7-1 Bond valuation Callaghan Motors' bonds have 25 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 9%, and the yield to maturity is 11%. What is the bond's current market price? Round your answer to the nearest cent. Problem 7-2 Yield to maturity and future price A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. % b. Assume that the yield to maturity remains constant for the next 2 years. What will the price be 2 years from today? Round your answer to the nearest cent
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