An 85 Percent Coupon Bond Pays Interest Semiannually and Has 10

question 71

Multiple Choice

An 8.5 percent coupon bond pays interest semiannually and has 10.5 years to maturity.The bond has a face value of $1,000 and a market value of $878.50.What is the yield to maturity?

• A) 5.16 percent
• B) 8.37 percent
• C) 8.78 percent
• D) 10.43 percent
• E) 11.21 percent

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Definitions:

Contribution Format

A type of income statement presentation that separates fixed and variable costs, allowing for an easier assessment of how changes in volume affect profitability.

Contribution Format

A way of presenting income statements where variable costs are deducted from sales to find the contribution margin, then fixed costs are deducted to find net operating income.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Unit Sales

The total quantity of products sold within a specific period, not accounting for price or cost.