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What is the current yield on the bond

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Question - Lowder Inc. issued 10% semiannual coupon bonds with a $1,000 face value 5 years ago. The bonds had 25 years to maturity at the time when they were issued. Investors currently require a 12% rate of return in the market.

I. What is the price of the bond today?

II. What is the current yield on the bond?

III. What is the percent change in the price of the bond in 2 years' time when the market rate of interest falls to 9%?

IV. What is the dollar rate of return over that 2-year period?

Reference no: EM133028127

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