A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent. a)      What interest payments do bondholders receive each year? b)      At what price does the bond sell? c)      What will happen to the bond price if the yield to maturity falls to 6 percent ?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 11P
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A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent.

a)      What interest payments do bondholders receive each year?
b)      At what price does the bond sell?
c)      What will happen to the bond price if the yield to maturity falls to 6 percent ?
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