Chapter 6 Homework
8. A 6-year Circular File bond with face value $1,000 pays interest once a year of $80 and sells
for $950. (LO6-2)
What is its coupon rate?
What is its yield to maturity?
If Circular wants to issue a new 6-year bond at face value, what coupon rate must the
35. A bond’s credit rating provides a guide to its risk. Suppose that long term bonds rated Aa
currently offer yield to maturity of 7.5%. A-rated bonds sell at yields of 7.8%. Suppose that a