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IBM4035386 Yes Corporate Bond 3.375 08/01/2023 A3 AA 276 INTERNATIONAL BUSINESS MACHS CORP IBM.GT Corporate Bond 6.375 11/01/
• Use Par Value =1000, if not provided. Round your answer to two decimal places as showw below: your answer is reported as %:

there is no header, i am only asking about number 5 and 6 but this is all that is given
4. Assume a share of preferred stock pays an annual dividend of $12; the first dividend is in exactly 12 months. The preferre

i think these are the proper headers, 3.375 and 8.375 are the annualized dividends, 3.276 and 2.301 are the yield. The yes/no portion of the table could be redeamable, perpetual, or communitive i dont know how to tell which one it is.
Type Corporate IBM 40 35388 yes bond 3.375 08/01/2023 8,375 | 1/01/2019 Aas AATA Aas /AA-A international corporate bond Busin
business   finance   
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Answer #1

Solution:

a) The two reason why second bond is having lower yield are:

  1. The annualised coupon is higher, the price of the bond would be higher and hence the yield is lower.
  2. The time to maturity is lower as compared to the first bond and hence lower yield.

b) For the first bond the coupon (3.375) ~== yield (3.276) and hence it will be having a price almost equal to the par value.

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