A 10 percent coupon bond has 15 years to maturity and could be called in two years. If the bond is called, investors will earn 4 percent. The call premium is one year of coupon payments. If coupon payments are made annually and par value is $1,000, what is the bond's yield to maturity? Multiple Choice A.) 6.19 percent B.) 6.82 percent C.) 7.65 percent D.) 7.98 percent
Call Price = 1,000 + 100 = $1,100
Calculating Bond Price,
Using TVM Calculation,
PV = [FV = 1,100, PMT = 100, N = 2, I = 0.04]
PV = $1,205.62
Calculating Yield to Maturity,
Using TVM Calculation,
I = [PV = -1,205.62, PMT = 100, FV = 1,000, N = 15]
I = 7.65%
Yield to Maturity = 7.65%
A 10 percent coupon bond has 15 years to maturity and could be called in two...
A 5.5 percent coupon municipal bond has 16 years left to maturity and has a price quote of 92.55. The bond can be called in nine years. The call premium is one year of coupon payments. Compute the bond's yield to maturity and yield to call. Assume interest payments are paid semiannually and a par value of $5,000. Multiple Choice A.) YTM = 6.91 percent; YTC = 7.52 percent B.) YTM = 6.24 percent; YTC = 7.08 percent C.) YTM...
A 5.5 percent coupon municipal bond has 16 years left to maturity and has a price quote of $925.50. The bond can be called in nine years. The call premium is one year of coupon payments. Compute the bond's yield to maturity and yield to call. Assume interest payments are paid semi-annually..
A 4.5 percent coupon municipal bond has 10 years left to maturity and has a price quote of $977.50. The bond can be called in four years. The call premium is one year of coupon payments. What is the bond's taxable equivalent yield for an investor in the 33 percent marginal tax bracket? (Assume interest payments are paid semi-annually)
Arco Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 7.70% yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's yield to call? Hint: Calculate the bond's price based on the YTM, and then use that price to find the YTC. Your answer should be between 4.08 and 10.64, rounded to 2 decimal...
You're examining a bond with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's nominal yield to call? a. 4.42% b. 5.54% C. 6.77% d. 5.09% e. 5.59%
5pts Arco Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon semiannual payments, and a $1,000 par value. The bond has a 7.30% yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's yield to call? Hint: Calculate the bond's price based on the YTM, and then use that price to find the YTC. Your answer should be between 4.08 and 10.64, rounded to 2...
A 3.30 percent coupon municipal bond has 11 years left to maturity and has a price quote of 97.15. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bond's current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current yield [ % Compute the yield to maturity. (Do not round intermediate calculations. Round your...
keenan industries has a bond outstanding with 15 years to maturity, an 8% coupon paid semiannually, and a $1,000 par value. The bond has a 6% nominal annual yield to maturity, but it can be called in 5 years at a price of $1,080. What is the bond's nominal yield to call?
keenan industries has a bond outstanding with 15 years to maturity, an 8% coupon paid semiannually, and a $1,000 par value. The bond has a 6% nominal annual yield to maturity, but it can be called in 5 years at a price of $1,050. What is the bond's nominal yield to call?
A 15-year bond with a 10 percent semiannual coupon has a par value of $1,000. The bond may be called after 10 years at a call price of $1,050. The bond has a nominal yield to call of 6.5 percent. What is the bond's yield to maturity, stated on a nominal, or annual basis? a.5.97% b.6.30 % c. 6.75% d.6.95 % 0 .7.10 %