Yield to maturityharrimon industries bonds have 5 years, Ask an Expert

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Yield To Maturity

Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 8%.

a. What is the yield to maturity at a current market price of:

1. $802? Round your answer to two decimal places.

2. $1,055? Round your answer to two decimal places.

b. Would you pay $802 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92415723

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