They pay a 100 annual coupon and have a 15yr maturity but


1. Rust company's bonds currently sell for $1,080 and have a par value of $1,000. They pay a $100 annual coupon and have a 15yr maturity, but they can be called in 5 years at $1,125. What is their yield to maturity. YTM.

2. Dave's Corporation's bonds have a 10yr maturity, a 6.25% semi-annual coupon, and a par value of $1,000. The going interest rate (rs) is 4.75%, based on semiannual compounding. What is the bond's price?

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Financial Management: They pay a 100 annual coupon and have a 15yr maturity but
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