Question

The Saleemi​ Corporation's ​$1 000 bonds pay 5 percent interest annually and have 9 years until...

The Saleemi​ Corporation's ​$1 000 bonds pay 5 percent interest annually and have 9 years until maturity. You can purchase the bond for ​$885.

a. What is the yield to maturity on this​ bond?

b.Should you purchase the bond if the yield to maturity on a​ comparable-risk bond is 5 ​percent?

a. The yield to maturity on the Saleemi bonds is nothing​%. ​ (Round to two decimal​ places.)

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Answer #1

5.00% COUPON RATE NPER YEARS TO MATURITY $50.00 (face value x coupon rate) PMT= $1,000.00 FACE VALUE PRICE PV $885.00 6.75% rShould purchase the bond at 5% comparable risk, because at 5% bond should be traded at par but trading at discount

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