The market rate of interest falls to 61 over the next year


A. Mike November Corp's bonds have a coupon rate of 5.8%, paid semi-annually. The bonds have 9 years to maturity, and the market rate of interest is 6.6%. Assume a par value of $1000. What is Mike November's bonds "current yield?"

B. The market rate of interest falls to 6.1% over the next year. What has happened to Mike November's bonds "capital gains yield?"

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Financial Management: The market rate of interest falls to 61 over the next year
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