Question: How much would ana investor be willing to pay for a $1000, 10 percent coupon bond, with 23 years to maturity if the investor requires a 9 percent return, and the bond pays interest semi-annually?
a.) if the bond i sselling for $1150, what is the bond's yield to maturity?
b) should the investor purchase the bond? why?
c) if the bond is callable in 8 years at $1200, what is the bond's yield to call?