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Today is a day in May 2525 and a bond with an coupon rate of 8.0% just yesterday paid a coupon. The bond matures in November 2540 and its quoted bond price is 118.03 percent of par (semiannual compounding). Find the yield to maturity (YTM) and current yield.
a. The current yield is 5.86% and the YTM is 6.18%
b. The current yield is 3.39% and the YTM is 3.09%
c. The current yield is 6.78% and the YTM is 3.09%
d. The current yield is 6.78% and the YTM is 6.18%
e. The current yield is 3.39% and the YTM is 6.18%
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You can buy a car for $20,000, or you can lease it for 36 monthly payments of $350 each, with the first payment due immediately. At the end of the 36 months the car will be worth $10,000. Which alternative should you prefer if the interest rate (APR)..
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Mikkelson Corporation's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free r..
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