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Problem 7-10 Current yield, capital gains yield, and yield to maturity Hooper Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds
Problem 7-10 Current yield, capital gains yield, and yield to maturity
Hooper Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have an 9% 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 $950.70. The capital gains yield last year was - 4.93%.
- What is the yield to maturity? Round your answer to two decimal places.%
- For the coming year, what is the expected current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places.% For the coming year, what is the expected capital gains yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places.%
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