The firm has bonds outstanding that mature in five years. The par value of each bond is $1,000, the coupon rate is 5%, paid annually, and the current price is $915. What is the debt holder’s required rate of return?
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- The firm has bonds outstanding that mature in five years. The par
value of each bond is $1,000, the coupon rate is 5%, paid annually, and the current price is $915. What is the debt holder’s requiredrate of return ?
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- Suppose a firm is issuing bonds. Each bond has a face amount of $1,000, a stated rate of 8%, and a 10-year term. Coupon (interest) payments are made annually. When the bonds are issued, the market rate for similar bonds is 8%. After a year, the bond is selling for $1,015. What is the yield to maturity?Oriole, Inc., has bonds outstanding that will mature in eight years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $883.92, what is the yield to maturity that an investor who buys them today can expect to earn? Yield to maturity? What is the effective annual yield?Carries Clothes, Inc. has a five -year bond outstanding that pays $60 annually. The face value of each bond is $1,000, and the bond sells for $890. Use semi- annual interest payments if it applies. What is the bond’s coupon rate? What is the current yield? What is the yield to maturity?
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