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J&J has an outstanding issue of 20- year maturity bond with face value of $1,000 and...

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Finance

J&J has an outstanding issue of 20- year maturity bond withface value of $1,000 and a coupon of 8%, paying coupon interestsemi-annually. If the market price of this bond is $1200, what isthe rate of return investors are demanding on this bond?

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4.3 Ratings (543 Votes)
Here we need to compute the YTM of the bondPar Value of the bond 1000Current price of the bond 1200Annual coupon rate of the bond 8Annual coupon payment Annual coupon rateFace Value 81000 80Time to maturity in years 20 yearsIt is given    See Answer
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