Question
Yield to maturityThe Salem Company bond currently sells for $1,245.66 has a coupon interest rate of 14%a $1000 par value, pays interest annually, and has
Yield to maturityThe Salem Company bond currently sells for $1,245.66 has a coupon interest rate of 14%a $1000 par value, pays interest annually, and has 13 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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Money Talks Explaining How Money Really Works
Authors: Nina Bandelj ,Frederick F. Wherry ,Viviana A. Zelizer
1st Edition
0691202893, 978-0691202891
