Assume that the yield to maturity remains constant for the


1. A bond has a $3000 par value, 20 years to maturity, a 7.5% annual coupon, and sells for $2500 assume that the Yield to maturity remains constant for the next five years what will the price be five years from today?

2. New company’s bonds have 20 years remaining to maturity. Interest is paid annually, they have a $10,000 par value, the coupon interest rate is 5%, and the yield to maturity is 8%. What is the bonds current market price?

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Financial Management: Assume that the yield to maturity remains constant for the
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