Question
The Gustav Corporations bonds have a $1000 par value, 5 years remaining to maturity, and the coupon rate is 9%. The interest is paid annually.
The Gustav Corporations bonds have a $1000 par value, 5 years remaining to maturity, and the coupon rate is 9%. The interest is paid annually.
a) What is the YTM at a current market price of $1,104?
b) What is the YTM at a current market price of $829?
c) If you thought that the appropriate rate of interest rate for these bonds was 12%, would you pay $829 for one of these bonds? Why?
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Principles Of Investments
Authors: Alan Marcus, Zvi Bodie, Michael Drew, Anup Basu, Alex Kane
1st Edition
0071012389, 978-0071012386
