Pedrollo Pumps has issued a bond which has a $1,000 par value and a 15 percent annual coupon interest rate.

Pedrollo Pumps has issued a bond which has a $1,000 par value and a 15 percent annual coupon interest rate. The bond will mature in twenty years and currently sells for $1,250.
Required:
a) Using the approximation formula, calculate the yield to maturity (YTM)
b) Calculate the current yield of Pedrollo bonds.

Expert Solution

jeff jeffy answered 2 years ago

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