A bond with a 5 percent coupon 50 a year that matures after


Q1. A bond with a 5 percent coupon ($50 a year) that matures after eight years is selling for $779. What is the yield to maturity?

Q2. If a preferred stock pays an annual $4.50 dividend, what should be the price of the stock if comparable yields are 10 percent? What would be the loss if yields rose to 12 percent?

Q3. What is the value of a $1,000 zero coupon government bond that matures after eight years, if comparable yields are 7%?

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Accounting Basics: A bond with a 5 percent coupon 50 a year that matures after
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