Problemabc issued new bonds on jan 1991 the bonds sold at, Ask an Expert

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Problem:

ABC issued new bonds on Jan., 1991. The bonds sold at par of $1,000, have a coupon of 12% and mature in 30 years. Interest is paid semi-annually on June 30 and Dec 31.

Required:

Question 1: What was the YTM on Jan.1, 1991?

Question 2: What was the price on Jan. 1, 1996, if interest rates had fallen to 10%?

Question 3: What is the current yield on the bond on Jan.1, 1996, given the previous price? On July 1, 2014, the bonds will sell for $916.42, what will be the ytm?

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169445

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