Recently the high and low market prices of Canadian Pacific Limited's debentures (4 %) were $790 and $475 respectively. Determine the yield-to-maturity of one of these debentures if it was purchased under the following conditions:
a. at the high market price
b. at the low market price
Since there is no maturity date, the yield to maturity is simply the coupon yield (4%) times the par value ...
The solution explains the formulas and calculations to arrive at the correct answer.