BONDS - BONDS 1. Bonds of Company XYZ are trading at $940....

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BONDS 1. Bonds of Company XYZ are trading at $940. The bonds carry a coupon rate of 9% (paid annually) and have 22 years left till maturity. The Face value is $1000. What is the YTM (yield to maturity)? What is the current yield? What is the capital gains yield? If bonds with similar riskiness are providing an yield of 9.5%, are XYZ bonds a good investment? Are they over/under priced and by how much? 2. Bonds of PQR are trading at $1040. The coupon rate is 12% (paid annually) and the bonds have 13 years left till maturity. What is the YTM? What is the current yield and what is the capital gains yield? If the opportunity cost of investing in the bonds is 12%, by how much are the bonds over/under priced? 3. Bonds of LMN carry a coupon of 8%. The Bonds are trading at $880 and have 15 years left till maturity. What is the YTM? What is the current yield? What is the capital gains yield? If the required rate is 10%, by how much are the bonds over/under priced?
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