Complete the following problems, making sure to show/explain your work:
- Yest Construction Company’s bonds currently sell for $1,065. They have an 8-year maturity, an annual coupon of $70, and a par value of $1,000. What is their yield to maturity?
- A company has 8% semiannual payment bonds that mature in 14 years and have a par value of $1,000. The market yield on the bonds is currently 8%.
- What is the price of these bonds?
- What is the price of these bonds if it pays annually instead of semiannual as stated above?
- What is their current yield?
- Capital gain yield?