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Yield to maturity The Salem Company bond currently sells for 804.01, has a coupon interest rate of 9% and a $1000 par value, pays interest

Yield to maturityThe Salem Company bond currently sells for 804.01, has a coupon interest rate of 9% and a $1000 par value, pays interest annually,and has 18 years to maturity.

a. Calculate the yield to maturity

(YTM)

on this bond.

b. Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond.

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