What is the bond yield to maturity

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1. Assume that a firm has just announced that it will do a Seasoned Equity Offering in the near future. The market generally interprets this as a negative signal about the quality of the firm and the stock price will jump down by 2% to 3% on average.

True or False

2. . (Yield to maturity) A bond's market price is $950. It has a $1,000 par value, will mature in 14 years, and has a coupon interest rate of 8 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 28 years? What if it matures in 7 years? (Round to two decimal places.)

Reference no: EM132061133

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