Bonds are expected to have an annual coupon rate

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Digicel Limited, a mobile telephone company based in Bermuda, issued $1.4 billion in bonds in 2007, including $1 billion with a maturity date in 2015. The bonds are expected to have an annual coupon rate of 9.25% and coupon payments are made annually (end of year). Suppose you purchase a $10,000 denomination bond at par (at the time of offering) but you sell the bond after seven years (after you receive the coupon payment) for $10,200. The purchaser keeps the bond to maturity. What is your (annual) yield in this case?

Reference no: EM13747224

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Bonds are expected to have an annual coupon rate : Digicel Limited, a mobile telephone company based in Bermuda, issued $1.4 billion in bonds in 2007, including $1 billion with a maturity date in 2015. The bonds are expected to have an annual coupon rate of 9.25% and coupon payments are made annually..

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