Question: Please complete the following problems. Show all your work and supporting calculations. The coupon rate on a bond is 7 5/8 %, and the bond

Please complete the following problems. Show all your work and supporting calculations.

  • The coupon rate on a bond is 7 5/8 %, and the bond is selling at 95. What is the bonds current yield?
  • A bond with a coupon rate of 12.5% per year (payable semi-annually ) has a remaining life of 7.5 years and a yield to maturity of 14%. What is the bonds current yield? Assume the bond is fairly priced.
  • Find the current yield of the bond in the problem above assuming the yield to maturity is 9%.
  • Two years ago, you bought a fifteen year bond at its face value of $1,000. The coupon rate on this bond is 9%, payable annually. Today (just after receiving the second annual coupon payment), the current yield on the bond is 7.5%. What is the value of the bond today?

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