ABC Corporation issued at par $100 million semi-annual coupon-paying bonds on January 1, 2010. The bond’s YTM at issuanc

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ABC Corporation issued at par $100 million semi-annual
coupon-paying bonds on January 1, 2010. The bond’s YTM at issuance
was 8% (APR). The bond matures on January 1, 2020
Compute the market value of this bond on January 1, 2011 if it
was priced to produce an effective semi-annual yield to maturity of
6% on that date.
Assume the bond is sold on January 1, 2011. Calculate the
current yield and 1-year capital gains yield (CGY1-year).
Can the 1-year total yield be determined by the sum of current
yield and capital gains yield? Explain your answer.