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The Miami Corporation issued a new series of bonds on January 1, 1992. The bonds were sold at par ($1,000); had a 11% coupon; and mature in 30 years, on December 31, 2021. Coupon payments are made semiannually (on June 30 and December 31). Find the following information (please show written out work):

a. What was the YTM on January 1, 1992?

b. What was the price of the bonds on January 1, 1992, 5 years later, assuming that interest rates had fallen to 10%?

c. Find the current yield, capital gains yield, and total return on January 1, 1997, given the price as determined in Part b.

d. On July 1, 2015, 6½ years before maturity, Miami Corporation's bonds sold for $916.42. What were the YTM, the current yield, the capital gains yield, and the total return at that time?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92861961

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