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What bond expected current yield and capital gains yield

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Reference no: EM132519815

The corporate bond was issued at par at an interest rate of 9% (i.e. coupon rate). The interest is paid annually, and the bond has 9 years to maturity. The bond has a call protection of 4 years. Due to the changes in interest rate the bond's market price has fallen to $903.50.

Question a) What is the bond's yield to maturity (YTM)?

Question b) What is the bond's expected current yield and capital gains yield?

Question c) How likely is it that the bond issue will be called? Explain.

Reference no: EM132519815

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