A GM and a Ford bond both have 4 years to maturity, a $1,000 par...
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Finance
A GM and a Ford bond both have 4 years to maturity, a $1,000 par value, a BB rating and pay interest semiannually. GM has a coupon rate of 6.7%, while Ford has a coupon rate of 5.4%.
Part 1
The GM bond trades at 91.17 (percent of par). What is the yield to maturity (YTM)? (3+ decimals)
Part 2
What should be the price of the Ford bond (in $)? Since Ford and GM bonds have the same ratings, you can assume that Ford has the same YTM as GM.
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