Your boss is back. This time he/she provides you a partial model to a bond valuation. This bond is a 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has been issued.) She needs you to complete the partial model for her. She needs the following to be answered.
As HOMEWORKLIB RULES rule i will be solving four subparts (a to d)
Basic input date:
Years to maturity=20
Period per year=2
Periods to maturity=20*2=40
coupon rate=8%
par value=1000
periodc payment=(1000*8%/2)=40
current price=1100
call price=1040
periods if callable=5*2=10
a)Periodic YTM
=rate(nper,pmt,pv,fv,type)
=rate(40,400,-1100,1000,0)=4.09%
Annualozed nominal YTM=2*4.09%=8.19%
b)Current yield= periodic payment/price of bond
=80/1100
=7.27%
C)Capital gain/loss yield=YTM-current yield
=8.19%-7.27%
=0.92%
d)periodic YTC=
=rate(nper,pmt,pv,fv,type)
=rate(10,40,-1100,1040,0)=4.30%
Annualized nominal YTC=2*4.30%=8.59%
Your boss is back. This time he/she provides you a partial model to a bond valuation....
Your boss is back. This time he/she provides you a partial model to a bond valuation. This bond is a 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has been issued.) She needs you to complete the partial model for her. She needs the following to be answered. What is the bond's yield to maturity? What...
Your boss is back. This time he/she provides you a partial model to a bond valuation. This bond is a 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has been issued.) She needs you to complete the partial model for her. She needs the following to be answered. What is the bond's yield to maturity? What...
Your boss is back. This time he/she provides you a partial model to a bond valuation. This bond is a 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has been issued.) She needs you to complete the partial model for her. She needs the following to be answered. What is the bond's yield to maturity? What...
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