High-yield junk bond with the features

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Reference no: EM131078181

Tinker Spy Corp. has a high-yield junk bond with the following features: Principal $500 Coupon 0% for years 1 through 5 and 11% for years 6 through 10 Maturity 10 years The current interest rate on comparable debt is 10 percent. If you expect that the interest rate will be 7 percent five years from now

What is your potential gain or loss if your expectation is correct and interest rates are 7 percent after five years? Round your answer to the nearest dollar

Reference no: EM131078181

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