What is the yield to maturity on this bond

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Your company issued a 10 percent coupon rate bond with the face value of $1,000. The bond pays interest rate semiannually, and the bond has 10-year to maturity.

a. If the required interest rate on the bond is 10 percent, what is the bond’s value? Write down the formula and show your work.

b. What is the yield to maturity on this bond?

c. Is the yield to maturity greater or less or equal to the coupon rate? Why?

d. What is the current yield on this bond?

e. What is the effective annual yield on this bond?

f. Is the EAY higher or lower than the yield to maturity? Why?

Reference no: EM131848212

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