Last year, the ABC Corporation had issued 8% coupon (semiannual), 20-year, AA-rated bonds (par value = $1,000)
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Question:
Last year, the ABC Corporation had issued 8% coupon (semiannual), 20-year, AA-rated bonds (par value = $1,000) to finance its business growth.
If investors are currently offering $1,200 on each of these bonds, what is their expected yield to maturity on the investment?
If you are willing to pay no more than $980 for this bond, what is your expected YTM?
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