a. | |||||||
Price of bond | Par value*Current quote price | ||||||
Price of bond | 1000*105.339% | ||||||
Price of bond | $1,053.39 | ||||||
b. | |||||||
Current Yield | Coupon amount/Price | ||||||
Coupon amount | 1000*6.80% | ||||||
Coupon amount | $68.00 | ||||||
Current Yield | 68/1053.39 | ||||||
Current Yield | 6.46% | ||||||
c. | |||||||
The dollar price of bond is higher than its par value and thus bond is trading at premium. | |||||||
The bond is selling at premium because the price is higher than par value. | |||||||
d. | |||||||
The yield to maturity is lower than the current yield because the former includes $53.39 in price appreciation between today and the May 15, 2027 bond maturity. | |||||||
Bond round yede Asume at the radio Management Corporation 11.000 per bond 6.800.coupon, matures on May...
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