Problem:
Tidewater Home Health Care, Inc, has a bond issue outstanding with 8 years remaining to maturity, a coupon rate of 10 percent with interest paid annually, and a par of value of $1,000. The current market price of the bond is 1,251.22
Required:
Question 1: What is the bond's yield to maturity?
Question 2: Now assume that the bond has a semiannual coupon payments, what is its yield to maturity in this situation?
Note: Provide support for rationale.