Heymann Company bonds have 4 years left to maturity. Interest is paid annually, and the bonds
June 7th, 2024
Heymann Company bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 a year calue and a coupon rate of 9 percent.a.) What is the yield to maturity at a current market price of (1)$829 or (2) $1,104?b.) Would you pay $829 for each bond if you thought that a “fair” market interest rate for such bonds was 12 percent-that is, if r(a)=12 percent?Explain your answer.
