Compute capital gains yield

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Reference no: EM131444297

Quiver Archery’s bond currently is selling for $1,065; its value one year ago was $990. The bond has a $1,000 maturity value and a coupon rate equal to 7% and it matures in 8 years. Interest is paid annually. (a) Compute the current yield and capital gains yield Quiver’s bondholders earned during the year. (b) Also, compute capital gains yield that the bond will generate in the third year (year 3) of its life.

Reference no: EM131444297

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