What Is the Yield to Maturity of A(n) Eight-Year, $5000

question 55

Multiple Choice

What is the yield to maturity of a(n) eight-year, $5000 bond with a 4.4% coupon rate and semiannual coupons if this bond is currently trading for a price of $4723.70?

• A) 6.31%
• B) 5.26%
• C) 7.36%
• D) 2.63%

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Definitions:

Weighted Average Cost of Capital (WACC)

A calculation of a company's cost of capital, weighted by the proportion of each source of capital (debt and equity), used to see how much interest the company pays for every dollar it finances.

Cost of Preferred Stock

The dividend required to be paid by an entity for the funds received from issuing preferred shares, typically expressed as a percentage.