4. Bond Pricing. A 6-year Circular File bond pays interest of $80 annually and sells for $950. What is its coupon rate, current yield, and yield to maturity?
5. Bond Pricing. If Circular File (see question 4) wants to issue a new 6-year bond at face value, what coupon rate must the bond offer?
6. Bond Yields. An AT&T bond has 10 years until maturity, a coupon rate of 8 percent, and sells for $1,100.
a. What is the current yield on the bond?
b. What is the yield to maturity?
YTM 9.12% (YTM is found out by IRR function of the excel)
Coupon rate= Interest/Face value= 8/100= 8.00%
Current yield= ...
Bond Pricing and Bond Yields are investigated.