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The Pioneer Petroleum Corporation has a bond outstanding with an $90 annual interest payment, a market...

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Finance

The Pioneer Petroleum Corporation has a bond outstanding with an$90 annual interest payment, a market price of $910, and a maturitydate in five years. Assume the par value of the bond is$1,000.  
    
Find the following: (Use the approximation formula tocompute the approximate yield to maturity and use the calculatormethod to compute the exact yield to maturity. Do not roundintermediate calculations. Input your answers as a percent roundedto 2 decimal places.)

a.Coupon rate%
b.Current yield%
c-1.Approximate yield to maturity%
c-2.Exact yield tomaturity%

Answer & Explanation Solved by verified expert
4.2 Ratings (842 Votes)
aCoupon rate Annual interest Face valueCoupon rate 90 1000Coupon rate    See Answer
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Transcribed Image Text

The Pioneer Petroleum Corporation has a bond outstanding with an$90 annual interest payment, a market price of $910, and a maturitydate in five years. Assume the par value of the bond is$1,000.      Find the following: (Use the approximation formula tocompute the approximate yield to maturity and use the calculatormethod to compute the exact yield to maturity. Do not roundintermediate calculations. Input your answers as a percent roundedto 2 decimal places.)a.Coupon rate%b.Current yield%c-1.Approximate yield to maturity%c-2.Exact yield tomaturity%

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