A 20-year maturity, 7.6% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,170. The bond currently sells at a yield to maturity of 6.6% (3.30% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call b. What is the yield to call if the call price is only $1,120? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % Yield to call % c. What is the yield to call if the call price is $1,170 but the bond can be called in four years instead of seven years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) %
A 20-year maturity, 7.6% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,170. The bond currently sells at a yield to maturity of 6.6% (3.30% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call b. What is the yield to call if the call price is only $1,120? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % Yield to call % c. What is the yield to call if the call price is $1,170 but the bond can be called in four years instead of seven years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...
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