At what price does the bond sell

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A General Power bond with $1000 par value carries a coupon rate of 8%, has 9 years until maturity, and sells at a yield to maturity of 7%. (Assume annual interest payments.)

a. What interest payments do bondholders receive each year?

b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What will happen to the bond price if the yield to maturity falls to 6%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. If the yield to maturity falls to 6%, will the current yield be less, or more, than the yield to maturity?

Reference no: EM131886199

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