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Gray House Bond Calculation

Gray House is issuing bonds paying $105 annually that will mature fifteen years from today. The bond is currently selling for $980.

(a) Coupon Rate
(b) Current Yield
(c) Yield To Maturity

Solution Preview

(a) Coupon Rate = Annual Interest/Par Value = 105/1,000 = 10.5% (bonds usually have a par value of ...