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Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate...

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Finance

Last year Janet purchased a $1,000 face value corporate bondwith an 8% annual coupon rate and a 30-year maturity. At the timeof the purchase, it had an expected yield to maturity of 12.56%. IfJanet sold the bond today for $927.06, what rate of return wouldshe have earned for the past year? Do not round intermediatecalculations. Round your answer to two decimal places.

Answer & Explanation Solved by verified expert
3.6 Ratings (447 Votes)
Market Price of the Bond The Price of the Bond is the Present Value of the Coupon Payments plus the Present Value of the Face ValuePar Value The Price of the Bond is normally calculated either by using EXCEL Functions    See Answer
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