What is the yield to maturity at a current market price

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Reference no: EM131010907

Yield to Maturity: Heymann company bond have 4 years left to maturity. Interest is paid annually, and the bonds have a $1000 par value and a coupon rate of 9%.

a. what is the yield to maturity at a current market price of (1) $829 and (2) $1104?

b. would you pay $829 for each bond if you thought that a "fair" market interest rate for such bonds was $12%, that is if rd=12% ? Explain.

Reference no: EM131010907

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