1. Ozarks Managed Care Inc. issued some callable bonds 19 years ago with 30-year life at their par value of $1,000. These bonds pay 9% coupon rate with annual payment. The firm just announced that these bonds are being called with $100 call premium. A non- callable bond with the same features (time till maturity; coupon rate, and par value) and same risks are selling at $1195 a piece on the market today. What's the yield to maturity on the non-callable bonds? Please round your answer to 2 decimal places and skip the %sign, e.g. put 2.35 instead of 2.35%.

1. Ozarks Managed Care Inc. issued some callable bonds 19 years ago with 30-year life at their par value of $1,000. These bonds pay 9% coupon rate with annual payment. The firm just announced that these bonds are being called with $100 call premium. A non- callable bond with the same features (time till maturity; coupon rate, and par value) and same risks are selling at $1195 a piece on the market today. What's the yield to maturity on the non-callable bonds? Please round your answer to 2 decimal places and skip the %sign, e.g. put 2.35 instead of 2.35%.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles

Section: Chapter Questions

Problem 1P: Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually...

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