Gehrs gears inc. has bonds outstanding that mature in 14, Ask an Expert

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Gehr's Gears, Inc., has bonds outstanding that mature in 14 years and 3 months from today. The bonds have an annual coupon rate of 15% and pay interest every six months. The bonds are currently selling for $1,100.

a. Assuming a coupon payment was made yesterday and there are 29 more coupon payments remaining to be paid in the life of the bond, what is the YTM on this bond? What is the APY for this bond under these assumptions?

b. Assuming a coupon payment was made yesterday and there are 28 more coupon payments remaining to be paid in the life of the bond, what is the YTM on this bond? What is the APY for this bond under these assumptions?

c. See the end-of-chapter minicase about partial coupon periods. Assuming a coupon payment was made, as it actually was, three months ago and there are 29 more coupon payments remaining to be paid in the life of the bond, what is the YTM on this bond? What is the APY for this bond under these assumptions?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M951469

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