Hooper Printing Inc has bonds outstanding with 9 years left to maturity The bonds have an 8 annual coupon rate and were issued 1 year ago at their par value of $1,000 However, due to changes in interest rates, the bonds market price has fallen to $901 40 The capital gains yield last year was $9 86 ...

a Solving for YTM N 9 PV 90140 PMT 80 FV 1000 IYR YTM 96911 b The current yie ...

Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 8%

Question:

Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 8% annual rate and were issued 1 year ago at their of $1,000. However, due to changes in interest rates, the bond’s market price has fallen to $901.40. The capital gains yield last year was $9.86%.
a. What is the yield to maturity?
b. For the coming year, what are the expected current and capital gains yields?
c. Will the actual realized yields be equal to the expected yields if interest rates change? If not, how will they differ?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...