Question: Problem 6-18 Bond Yields [LO 2] PK Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual

Problem 6-18 Bond Yields [LO 2]

PK Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual payments and currently sell for 108.5 percent of par.

Requirement 1:

What is the current yield on PK's bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Current yield

________________ %

Requirement 2:

What is the YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Yield to maturity

_______________ %

Requirement 3:

What is the effective annual yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Effective annual yield__________________

Problem 6-18 Bond Yields [LO 2] PK Software has 7.7 percent coupon

PK Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual payments and currently sell for 108.5 percent of par. Requirement 1:What is the current yield on PK's bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)Current yield________________ % Requirement 2:What is the YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)Yield to maturity_______________ % Requirement 3:What is the effective annual yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

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