Subpart (a)
To calculate: Dollar price of the bond.
Introduction:
Subpart (b)
To calculate: Total interest expense.
Introduction:
Current yield of bond: Current yield of bond is the annual interest payment divided by the current price of bond.
Subpart (c)
To discuss: Is the bond sells at par, at discount or at premium.
Subpart (d)
To discuss: Comparison of bond current yield and YTM.
Introduction:
Yield to maturity (YTM): The
Current yield of bond: Current yield of bond is the annual interest payment divided by the current price of bond.
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