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Levi Strauss & Company has an outstanding B-rated bond that has a coupon rate of 12.25%,...

Levi Strauss & Company has an outstanding B-rated bond that has a coupon rate of 12.25%, a face value of $1000 and is currently priced at $1117.50. If this bond pays interest semi-annually and matures in 4 years,

  1. what is its yield to maturity (YTM)?
  2. Is this bond sold at a premium? Explain.
  3. What is its current yield?
  4. What would happen to the price of this bond if the real interest rate increases?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 7 months ago
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