Question

your firm has outstanding bonds with semi annual coupon payments and a face value of $1000....

your firm has outstanding bonds with semi annual coupon payments and a face value of $1000. the price today is $1075, the yield yo maturity is 8% and the bonds mature in 15 years.

A) compute the annual coupon rate
B) compute the capital gains yield
C) is the bond a premium or discount? why?
D) if the bond price goes up, what will happen to the coupon rate?

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