Explain capital gain from bonds

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Reference no: EM1317314

Explain Capital Gain from Bonds

Current yield and capital gains yield

Meade Corporation bonds mature in 6 years and have a yield to maturity of 8.5 percent. The par value of the bonds is $1,000. The bonds have a 10 percent coupon rate and pay interest on a semi-annual basis. What are the current yield and capital gains yield on the bonds for this year? (Assume that interest rates do not change over the course of the year).

Reference no: EM1317314

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