Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which is also the

Question:

Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which is also the amount of principal to be paid at maturity. The bonds are currently selling for $850. They have 10 years to maturity. Annual interest is 9 percent ($90) paid semiannually. Compute the yield to maturity.

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,...

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