A 10-year corporate bond has an annual coupon payment of 10%. The bond is currently selling at par ($1,000). Which of the following statement is NOT correct? A) The bond’s yield to maturity is 10%. B) The bond’s current yield is 10%. C)If the bond’s yield to maturity remains constant, the bond’s price will remain at par. D)The bond’s capital gain yield is 10%.

A 10-year corporate bond has an annual coupon payment of 10%. The bond is currently selling at par ($1,000). Which of the following statement is NOT correct? A) The bond’s yield to maturity is 10%. B) The bond’s current yield is 10%. C)If the bond’s yield to maturity remains constant, the bond’s price will remain at par. D)The bond’s capital gain yield is 10%.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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