How much would you pay for a perpetual bond that pays an annual coupon of $200 per year and yields on competing instruments are 20%? You would pay $ (Round your response to the nearest penny.) If competing yields are expected to change to 12%, what is the current yield on this same bond assuming that you paid $1,000? The current yield is %. (Round your response to the nearest integer.) If you sell this bond in exactly one year, having paid $1,000, and received exactly one coupon payment, what is your total return if competing yields are 12%? Your total return is %. (Round your response to two decimal places.)
How much would you pay for a perpetual bond that pays an annual coupon of $200 per year and yields on competing instruments are 20%? You would pay $ (Round your response to the nearest penny.) If competing yields are expected to change to 12%, what is the current yield on this same bond assuming that you paid $1,000? The current yield is %. (Round your response to the nearest integer.) If you sell this bond in exactly one year, having paid $1,000, and received exactly one coupon payment, what is your total return if competing yields are 12%? Your total return is %. (Round your response to two decimal places.)
Chapter16: Interest, Rent, And Profit
Section: Chapter Questions
Problem 1WNG
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