How much would you pay for a perpetual bond that pays an annual coupon of ​$80 per year and yields on competing instruments are 20​%?   You would pay $. ​(Round your response to the nearest penny.​) Part 2 If competing yields are expected to change to 8​%, what is the current yield on this same bond assuming that you paid ​$400?   The current yield is ​%. ​(Round your response to the nearest​ integer.) Part 3 If you sell this bond in exactly one​ year, having paid ​$400, and received exactly one coupon​ payment, what is your total return if competing yields are 8​%?   Your total return is ​%. ​ (Round your response to two decimal places.​)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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How much would you pay for a perpetual bond that pays an annual coupon of ​$80 per year and yields on competing instruments are 20​%?
 
You would pay $.
​(Round your response to the nearest penny.​)
Part 2
If competing yields are expected to change to 8​%, what is the current yield on this same bond assuming that you paid
​$400?
 
The current yield is ​%. ​(Round your response to the nearest​ integer.)
Part 3
If you sell this bond in exactly one​ year, having paid ​$400, and received exactly one coupon​ payment, what is your total return if competing yields are 8​%?
 
Your total return is ​%. ​ (Round your response to two decimal
places.​)
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