A bond matures in 12 years, and pays an 8 percent annual coupon. The bond has a face value of $1,000, and currently sells for $985. What is the bond’s current yield and yield to maturity? A. Current yield = 8.00%; yield to maturity = 7.92%. B. Current yield = 8.12%; yield to maturity = 8.20%. C. Current yield = 8.20%; yield to maturity = 8.37%. D. Current yield = 8.12%; yield to maturity = 8.37%. E. Current yield = 8.12%; yield to maturity = 7.92%

A bond matures in 12 years, and pays an 8 percent annual coupon. The bond has a face value of $1,000, and currently sells for $985. What is the bond’s current yield and yield to maturity? A. Current yield = 8.00%; yield to maturity = 7.92%. B. Current yield = 8.12%; yield to maturity = 8.20%. C. Current yield = 8.20%; yield to maturity = 8.37%. D. Current yield = 8.12%; yield to maturity = 8.37%. E. Current yield = 8.12%; yield to maturity = 7.92%

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 14P: Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has...

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