Please, write with a detailed solution) A Macrohard Corp bond carries an 8 coupon, paid annually and has 10 years to maturity The par value is $1000 and the required rate of return is 5 a) Calculate the price of the bond today (P 0 ) b) Is this a discount or premium bond Explain c) Calculate the price of the bond one year from now (P 1 ) d) If you buy the bond today and sell it one year from now, calculate i) Current yield ii) Capital gains yield iii) Total rate of return (yield)

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Question: Please, write with a detailed solution) A Macrohard Corp. bond carries an 8% coupon, paid annually and has 10 years to maturity. The par value

Please, write with a detailed solution)

A Macrohard Corp. bond carries an 8% coupon, paid annually and has 10 years to maturity. The par value is $1000 and the required rate of return is 5%.

a) Calculate the price of the bond today (P₀)

b) Is this a discount or premium bond? Explain?

c) Calculate the price of the bond one year from now (P₁)

d) If you buy the bond today and sell it one year from now, calculate

i) Current yield

ii) Capital gains yield

iii) Total rate of return (yield)

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