Total return of the bond in dollars, Accounting Basics

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Total return of the bond in dollars

Problem:

A 8.5 percent coupon bond with 13 years left to maturity is priced to offer a 6.75 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.6 percent.

Required:

Question 1: What would be the total return of the bond in dollars?

Question 2: What would be the total return of the bond in percentage?

Note: Provide support for rationale.

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Accounting Basics: Total return of the bond in dollars

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Accounting Basics: Total return of the bond in dollars

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