Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%.a. What is the yield to maturity at a current market price of1. $845? Round your answer to two decimal places.%2. $1,085? Round your answer to two decimal places.%b. Would you pay $845 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13%?I. You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return.II. You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond.III. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return.IV. You would buy the bond as long as the yield to maturity at this price is less than your required rate of return.V. You would buy the bond as long as the yield to maturity at this price equals your required rate of return.

Yield to Maturity = [Annual Interest + {(FV-Price)/Maturity}] / [(FV+Price)/2] Annual Interest =…

Answered: Harrimon Industries bonds have 4 years…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Can I get the answers to 8.1 and 8.2.
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Pls show each and every step thanks!

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