A firm issues 5-year bonds with a coupon rate of 6%, paid semiannually. The credit spread for
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Question:
a) What should the price of the firm's outstanding 5-year bonds be if their face value is $1,000?
b) If the YTM at the beginning of the third year of the bond (3 years left to maturity) increases to 8%. What was the percentage change in the price of the bond over the past two years?
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780133507676
3rd Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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