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    Bond Yields Pioneer Petroleum Corporation: calculate coupon rate, current rate, YTM

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    Bond Yields

    16 -1: (Assume par value of the bonds is $1000 unless otherwise specified.)

    The Pioneer Petroleum Corporation has a bond outstanding with an $85 annual interest payment, a market price of $800, and a maturity date in five years. Find the following:

    a. The coupon rate.
    b. The current rate.
    c. The approximate yield to maturity.

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    Solution Preview

    a) Coupon Rate = Coupon payment / par value = $85/$1000 = 8.5%
    b) Current Rate = Coupon Rate / market price = $85/800 = 10.625%
    c) The ...

    Solution Summary

    The solution shows the calculations and the answers to the problems about bonds for Pioneer Petroleum.