Part 1: Suppose the following bond quote for IOU Corporation appears in the fina

Question

Part 1:
Suppose the following bond quote for IOU Corporation appears in the financial page of today's newspaper. Assume the bond has a face value of $1,000 and the current date is April 15, 2009. The yield to maturity of the bond is percent and the current yield is percent. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

Part 2:
One More Time Software has 10.0 percent coupon bonds on the market with 17 years to maturity. The bonds make semiannual payments and currently sell for 124.9 percent of par.

Required:

A. What is the current yield on the bonds?
B.The YTM?
C.The effective annual yield?

Explanation / Answer

I need the percents for maturity of the bond and current yield for part 1 for part 2: current yield = dividend / price so 10%/124.9% = 12.49% B. Yield to maturity = 7.40% use a financial calculator where n = 17*2, PV = -1249, PMT = 100/2, FV = 1000 where 2 = periods per year EAR = (1+nominal rate/periods)^periods

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