Purchase Solution

A General Co. bond has an 8 percent coupon

Not what you're looking for?

Ask Custom Question

A General Co. bond has an 8 percent coupon and pays interest annually. The face value is $1,000 and the current market price is $1,020.50. The bond matures in 20 years. What is the yield to maturity? (Answer format x.xx).

Purchase this Solution
Solution Summary

This solution is comprised of a detailed explanation to answer what is the yield to maturity of General Co.'s bond (see attachment).

Solution Preview

See attachment for further details.

A General Co. bond has an 8 percent coupon and pays interest annually. The face value is $1,000 and the current market price is $1,020.50. The bond matures in 20 years. What is the yield to maturity? (Answer format x.xx).

We need to calculate how much the bonds have been issued by using the formula as follows: ...

Purchase this Solution
Free BrainMass Quizzes
Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

View More Free Quizzes
Related BrainMass Solutions

  • Bond questions

    281229 Finance: Calculate YTM percent, coupon rate, current bond price, treasury bond yield The Timberlake-Jackson Wardrobe Co. has 10 percent coupon bonds on the market with 20 years left to maturity. The bonds make annual payments.

  • Payback methods, IRR, and Right Discount Rate

    202828 8-2 Suppose that a thirty-year U.S. Treasury bond offers a 4 percent coupon rate, paid semiannually. The market price of the bond is $1,000, equal to its par value. Payback Methods 8-2 Suppose that a thirty-year U.S.

  • Valuing Bonds-Bond Yields, Price of bonds, Bond returns

    And in BOND PRICING how do I compute the following: A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent a. What interest payments do bondholders receive each year?

  • Finance: Coupon Rates

    Ex: coupon rate on the bond is still 10 percent, and the YTM is 8 percent. 2. Price and yield move in opposite directions; if interest rates rise, the price of the bond will fall.

  • Bond Yield and Coupon Rate

    48385 Bond Yield and Coupon Rate 1. Bond Yields. A bond with par value $1,000 has a current yield of 7.5 percent and a coupon rate of 8 percent. What is the bond's price? 2. Coupon Rate.

  • Bond

    168550 A general motors bond (face value of $1000) carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 9 percent A general motors bond (face value of $1000) carries a coupon rate of 8 percent, has 9 years

  • Bond Yields

    Bond Yields: Petty Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1095, make semiannual payments, and mature in 20 years.

  • Important information about Bond Pricing

    18723 Important information about Bond Pricing A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent a) What interest payments do bondholders receive each year?

  • Weighted Average Cost of Capital (WACC) explained in this solution

    ABC Co. is a constant-growth rate of 8 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find common stock (rs). The firm's marginal tax rate is 40 percent.

View More Related Solutions