What is the effective annual yield on this bond is this a


Company Z has issued bonds with a par value of $1000, 20 years to maturity, and a coupon rate of 4%. The bond makes semiannual payments. The yield to maturity (YTM) is 6% per annum. What is the current price of the bond? What is the effective annual yield on this bond? Is this a discount or a premium bond? Discuss. If the market interest rate increases, what happens to this bond price. Discuss. If this bond would sell at par what could you tell about the YTM?

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Financial Management: What is the effective annual yield on this bond is this a
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