A 10% corporate bond with a face value of $10,000 and 30 years to maturity was issued in May of 2007. You bought this bond in May of 2010 (on its coupon day after the coupon had already been paid) when it was trading to yield 8%. Assume the market interest rate remained at 8% from then on and you sold the bond in May of 2017 (on its coupon day after the coupon had already been paid). Please, find the value of total interest, interest on interest, capital gain or loss, total income, and realized a return for the holding period between May 2010 and May 2017 (NOT since the time when it was first issued). Hint: Do not assume you purchased this bond at par and do not use your calculator’s bond function

Answer rating: 100% (QA)

We need to calculate the price of the bond after 10 years Here lets assume t... View the full answer