Bonds have four years remaining to maturity

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Reference no: EM131307899

The Heyman Company’s bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value; and the coupon interest rate is 9 percent.

a. What is the yield to maturity at a current market price of (1) $829 and (2) $1,104?

b. Would you pay $829 for one of these bonds if you thought that the appropriate rate of interest was 12 percent (that is, if rd=12%)? Explain your answer.

Reference no: EM131307899

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Bonds have four years remaining to maturity : The Heyman Company’s bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value; and the coupon interest rate is 9 percent. What is the yield to maturity at a current market price of (1) $829 and (2) $1,104..

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