What is the yield to maturity of the d&l bond

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The 7 percent annual coupon bonds of D&L Movers have a market price of $877.99, a face value of $1000, and 15 years until the maturity whild equivalent government debt trades at 5% yield.

a. What is the yield to maturity of the D&L bond.
b.What would the price of D&L movers' bond be a year from now if credit spread widens by 2% points while the comparable government yield increase by 1%
c. What would the IRR of an investment in the bond be if D&L movers' fails to make the last 2 coupon payments and the bankruptcy court reduces the face value to $400,yet it arrives on time?
d.What would the IRR of an investment in the bond be if D&L movers' default two years from now and you manage to sell the defaulted bond 6 month later for 30% of the face value while the restructuring was underway?

Reference no: EM13269640

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