A 10% coupon bond maturing in 10 years that requires annual payments is expected to make all coupon payments but to pay only 50% of par value at maturity. What is the expected yield on this bond if the bond is purchased for $975?
A. 10.00%
B. 6.68%
C. 11.00%
D. 8.68%
E. None of the options are correct.
B. 6.68%
FV = 500, PMT = 100, n = 10, PV = 975, i = 6.68%.
Business
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