Company B has a bond outstanding that pays a 8% coupon. The interest is paid semi-annually, and the bond matures in 10 years. The company B’s bond be selling at $980? What is its current yield? What is it capital gain or loss yield, if the bond can be sold at $990 in a year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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Company B has a bond outstanding that pays a 8% coupon. The interest is paid semi-annually, and the bond matures in 10 years. The company B’s bond be selling at $980? What is its current yield? What is it capital gain or loss yield, if the bond can be sold at $990 in a year?

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