Question
QUESTION 5 Part A: Brown Enterprises bonds currently sell at a 17.0% premium over par. They have a 5-year maturity, an annual coupon of $55
QUESTION 5
Part A: Brown Enterprises bonds currently sell at a 17.0% premium over par. They have a 5-year maturity, an annual coupon of $55 (paid once a year), and a par value of $1,000. What is their yield to maturity (round to one decimal place)?
a. 1.8%
b. 1.9%
c. 2.9%
d. 5.0%
e. 5.7%
Part B:
Brown Enterprises bonds currently sell at a 17.0% premium over par. They have a 5-year maturity, an annual coupon of $55 (paid once a year), and a par value of $1,000. What is the current yield of the bond (round to one decimal place)?
a. 4.3%
b. 4.7%
c. 5.3%
d. 7.1%
e. 8.2%
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