One year ago, the Klipek Company issued 15-year bond at par. The bond have a coupon rate of 4.5% and pay interest annually. Today, market rate of interest on these bond is 6.3%. 

How does today's price of this bond compare to the issue price? 

What is the expected bond price 1 year from now if interest rate remains the same? What is the current yield now and the expected capital gains yield over next year? 

What is the expected one year holding period return?

Answer rating: 100% (QA)

To determine how todays price of the bond compares to the issue price we need to calculate the present value of the bonds future cash flows using the ... View the full answer