Calculation of yield to maturity on bonds and finding out

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Reference no: EM1314504

Calculation of yield to maturity on bonds and finding out reason

The following bond quotations are taken from the Wall Street Journal dated Friday, September 5, 2003

Company	Coupon	Maturity	Last Price	Yield
International Paper	6.75	Sep. 1, 2011	108.198	5.468
Sara Lee	3.875	15-Jun-13	89.700	5.235
Wells Fargo	7.25	24-Aug-05	109.645	2.191
General Motors	7.125	15-Jul-13	101.201	6.952
Lincoln National	7.125	Dec. 15, 2011	105.903	5.307

a.) Explain why the International Paper bond is selling at a premimum but Sara Lee is selling at a discount

b.) Why is the yeild (yield to maturity) on the General Motors bond so much higher than the yield on the Sara Lee bond?

Reference no: EM1314504

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