• The Brownstone Corporation's bonds have 6 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%.
• 
  
  1. 1. What is the yield to maturity at a current market price of $835? Round your answer to two decimal places.
•  
•  
• 2, What is the yield to maturity at a current market price of $1,122? Round your answer to two decimal places. 
•  
•  
• 3. Would you pay $835 for one of these bonds if you thought that the appropriate rate of interest was 12% - that is, if r_d = 12%?
• 
  
• Explain your answer.
• 
  

Answer rating: 100% (QA)

To calculate the yield to maturity YTM we need to use the present value formula and solve for the di... View the full answer