Problem:
Rogue Racing Inc. has $1,000 par value bonds with a coupon rate of 8% per year making semiannual coupon payments. If there are twelve years remaining prior to maturity and these bonds are selling for $876.40,
Required:
Question: What is the yield to maturity for these bonds?
A) 8.00%
B) 8.33%
C) 9.77%
D) 9.80%
Note: Provide support for your rationale.