Bond yields (LO16-2) The People’s Corporation has a bond outstanding with an $80 annual interest payment, a market price of $700, and a maturity date of five years. Find the following:
a. The coupon rates.
Coupon Rate=(xxx)/(xxx)=$xx/$xxx=x%
b. The current rate.
current rate=(xxx)/(xxx)=$xx/$xx=xx.xx%
c. The yield to maturity.
Yield to Maturity=(xxx+(xx-xx)/(xxx))/((xx+xx)/2)
YTM=($xx+($xxxx-$xx)/x)/(($xxx+$xx)/2)
YTM= $xxxx/$xxx
=x.xxxxx=xx.xx%
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