Levi Strauss & Company has an outstanding B-rated bond that has a coupon rate of 12.25%, a face value of $1000 and is currently priced at $1117.50. If this bond pays interest semi-annually and matures in 4 years,
What is its yield to maturity (YTM)?
Is this bond sold at a premium? Explain.
What is its current yield?
What would happen to the price of this bond if the real interest rate increases?