What is the yield to maturity at current market price

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Reference no: EM131887632

A company’s bonds have four years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value; and the coupon interest rate is 8.75%.

(a) What is the yield to maturity at a current market price of $1,108?

(b) Would you pay $935 for one of these bonds if you thought that the market rate of interest is 10% per year?

Reference no: EM131887632

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