Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which, of course, is also the amount of principal to be paid at maturity. The bonds are currently selling for $850. They have 10 years remaining to maturity. The annual interest payment is 8 percent ($80). Compute the approximate yield to maturity, using Formula 10-2 on page 294.

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
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18. Bonds issued by the Coleman Manufacturing Company have a par value of
$1,000, which, of course, is also the amount of principal to be paid at maturity.
The bonds are currently selling for $850. They have 10 years remaining to
maturity. The annual interest payment is 8 percent ($80).
Compute the approximate yield to maturity, using Formula 10–2 on page 294.
Transcribed Image Text:18. Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which, of course, is also the amount of principal to be paid at maturity. The bonds are currently selling for $850. They have 10 years remaining to maturity. The annual interest payment is 8 percent ($80). Compute the approximate yield to maturity, using Formula 10–2 on page 294.
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