A 12 year bond has 8 years left to maturity and its coupon, Ask an Expert

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A 12 year bond has 8 years left to maturity and its coupon rate is 8%, with interest paid semi-annually. Consider each of the following situations separately.

If the required return on this bond (the current market rate for similar bonds) is 6%, will this bond sell for a premium or a discount (no calculations are needed)?

What is the bond’s current price if the market rate is 4.5%?

If the bond is currently quoted at $939.50 in the market, what is the Yield to Maturity?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92714865

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