Question: Kris P. Bacon is considering purchasing a Bitz bond with semiannual payments having an annual coupon rate fixed at 5 percent. Its face value of

Kris P. Bacon is considering purchasing a Bitz bond with semiannual payments having an annual coupon rate fixed at 5 percent. Its face value of $1,000 is payable in 8 years and the bond trades at $1,053.88.

What is the expected annual yield on the Bitz bond? (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Annual yield on the Bitz bond

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