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problem: The following bond quotations are taken from the Wall Street Journal dated Friday, September 5, 2003:

Company

Coupon

Maturity

Last Price

Yield

International Paper (IP)

6.75

01- Sep- 2011

108.2

5.468

Sara Lee (SLE)

3.875

15-Jun-2013

89.7

5.235

Wells Fargo (WFC)

7.25

24-Aug-05

101.2

6.952

General Motors (GM)

7.125

15-Jul-13

109.65

2.191

Lincoln National (LNC)

6.2

15-Dec-11

105.9

5.307

[A]    Describe why the International Paper bond is selling at a premium but the Sara Lee is selling at a discount.

[B]    describe why is the yield [yield to maturity] on the General Motors bond so much higher than the yield on the Sara Lee bond?

[C]    describe why is the yield [yield to maturity] on the Wells Fargo Bank bond so much less than the yield on the Lincoln National Corp. bond?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916287

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