Determine the bonds yield-to-maturity

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Reference no: EM131050937

BCC has issued 8? percent debentures that will mature on July 15, 2034. Assume that interest is paid and compounded annually. If an investor purchased a $1,000 denomination bond for $1,025 on July 15, 2014, determine the bond’s yield-to-maturity. Explain why an investor would be willing to pay $1,025 for a bond that is going to be worth only $1,000 at maturity.

Reference no: EM131050937

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