Effective annual yield on the debentures

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1. What is the present value of a series of payments of $2000 every four years in perpetuity with the first payment made immediately, if the annual rate is 9% per annum?

2. Polycorp debentures are selling for $108 (FV = 100) and mature in eight years. The coupon rate is 8% pa. What is the effective annual yield on the debentures?

3. Polycorp debentures are selling for $104 (FV = 100) and mature in ten years. The coupon rate is 6% pa, with coupons paid quarterly. What is the effective annual yield on the debentures?

(Answer (a) to the nearest dollar; (b) and (c) as a percentage to the nearest basis point)

Reference no: EM131444155

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