What Is the Yield on a Very Long-Term Bond with a $500

question 73

Multiple Choice

What is the yield on a very long-term bond with a $500 face value, a coupon of $35, and a current price of $650?

• A)37 percent
• B)35 percent
• C)5.4 percent
• D)7 percent
• E)17.7 percent

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its estimated useful life, recognizing the decrease in value over time.

Allocation Bases

Criteria or metrics used to distribute overhead costs to different departments or products in a company, ensuring accurate cost accounting.

Drilling Department

A division within a manufacturing or mining operation dedicated to the process of drilling, such as creating holes in the earth's surface or in materials.

Current Period

refers to the present accounting period under consideration, typically a month, quarter, or year.