Using the formula for YTM (yield to maturity) in the lecture, what is the rate of return for a bond issued by the Eastern Development Corporation of New England with a face value of $10.000 purchased for $15,000 that pays a 5.6% annual per year in dividends. The bond will be held for 8 years before it is redeemed. Answer should be calculated to two decimal places. For example if your answer is 5.55% enter 5.55 Hint: What is the value of the coupon associated with this bond? Your Answer
Using the formula for YTM (yield to maturity) in the lecture, what is the rate of return for a bond issued by the Eastern Development Corporation of New England with a face value of $10.000 purchased for $15,000 that pays a 5.6% annual per year in dividends. The bond will be held for 8 years before it is redeemed. Answer should be calculated to two decimal places. For example if your answer is 5.55% enter 5.55 Hint: What is the value of the coupon associated with this bond? Your Answer
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 12PROB
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