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 9%.
a)
YTM at 822:
=RATE(5,9%*1000,-822,1000)
=14.21%
YTM at 1120:
=RATE(5,9%*1000,-1120,1000)
=6.14%
b)
II. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds...
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