Question: Problem 6-5 Bond Pricing (LO1, 2) A General Power bond carries a coupon rate of 9.0%, has 9 years until maturity, and sells at a

Problem 6-5 Bond Pricing (LO1, 2)

A General Power bond carries a coupon rate of 9.0%, has 9 years until maturity, and sells at a yield to maturity of 8.0%. (Assume annual interest payments.)

a. What interest payments do bondholders receive each year?

b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What will happen to the bond price if the yield to maturity falls to 7.0%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. If the yield to maturity falls to 7.0%, will the current yield be less, or more, than the yield to maturity?

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