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Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 10-year maturity. At the time of the purchase, it had an expected yield to maturity of 13.09%. If Janet sold the bond today for $1,021.96, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.

Pelzer Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have a 8% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $901.40. The capital gains yield last year was -9.86%.

What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %

For the coming year, what is the expected current yield? (Hint: Refer to footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answer to two decimal places. %

For the coming year, what is the expected capital gains yield? (Hint: Refer to footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answer to two decimal places.

Financial Management, Finance

  • Category:- Financial Management
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