Sumitomo Mitsui Financial Group has a Eurobondbond issue with 18 years left to semi-annual bond is paying 6.1% coupon rate. The current bond price is priced at par. The yield of maturity of the bond is closest to: 5.65% 6.62% 3.31% 3.18%

Sumitomo Mitsui Financial Group has a Eurobondbond issue with 18 years left to semi-annual bond is paying 6.1% coupon rate. The current bond price is priced at par. The yield of maturity of the bond is closest to: 5.65% 6.62% 3.31% 3.18%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 7P: Bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 10% coupon rate,...

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

Sumitomo Mitsui Financial Group has a Eurobondbond issue with 18 years left to maturity. The
semi-annual bond is paying 6.1% coupon rate. The current bond price is priced at 105 percent of
par. The yield of maturity of the bond is closest to:
5.65%
6.62%
3.31%
3.18%

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