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Problem 22 Intro One year ago, Gangnam Inc. issued a 12-year, 5% coupon bond at its...

Question:

Problem 22 Intro One year ago, Gangnam Inc. issued a 12-year, 5% coupon bond at its par value of $1,000. This bond makes annu
Problem 22 Intro One year ago, Gangnam Inc. issued a 12-year, 5% coupon bond at its par value of $1,000. This bond makes annual, not semi-annual payments. The bond can be called in 8 years at a price of $1,100 and it now sells for $785.83. The bond has a yield to maturity of 8%. - Attempt 1/5 for 10 pts. Part 1 What is the current yield? Enter your answer as a decimal. 3+ decimals Submit Part 2 Attempt 1/5 for 10 pts. If interest rates do not change over the next year, what will be the capital gains yield for the coming year? Enter your answer as a decimal. 4+ decimals Submit

Answers

(Past - Current yield = Coupon amount x100 where Coupon cmount = 5% of 1000 = $50 Current yield = 100 = 6.363 % oro.064 pe yi

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