Find what interest payments bondholders receive each year

Reference no: EM132650327

Bond Pricing. A General Power bond carries a coupon rate of 8%, has 9 years until maturity, and sells at a yield to maturity of 7%. (Assume annual interest payments.)

Question a. What interest payments do bondholders receive each year?

Question b. At what price does the bond sell?

Question c. What will happen to the bond price if the yield to maturity falls to 6%?

Question d. If the yield to maturity falls to 6%, will the current yield be less, or more, than the yield to maturity?

Reference no: EM132650327

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