A company has a bond that yields (YTM) 6.80% and recently had capital gains of 0.33% ending with the price of 767.067727...
A company has a bond that yields (YTM) 6.80% and recently had capital gains of 0.33% ending with the price of 767.0677276 then the interest payment is closest to?
a. $727.94
b. $49.34
c. 0.06%
d. $49.50
Homework Answers
YTM = Current Yield + Capital Gain Yield
0.068 = Current Yield + 0.0033
Current Yield = 0.0647
Interest Payment = 0.0647(767.0677276)
Interest Payment = $49.63
So,
Interest Payment is closest to $49.50
Option D is correct.
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