Sakara Co. bonds are selling in the market for $1,000.These 9-year bonds pay 13% interest annually...
Sakara Co. bonds are selling in the market for $1,000.These 9-year bonds pay 13% interest annually on a $1,000 par value. If they are purchased at the market price, what is the expected rate ofreturn?
--------- % (answer in two decimal)
Homework Answers
Market Price is equal to the par value = $1,000
The bonds will be redeemed at par value i.e. $1,000
Hence, the rate of return will be equal to the interest rate
i.e. 13%
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