BBC has just issued a callable (at par) 5 year, 4% coupon bond with quarterly coupon...

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BBC has just issued a callable (at par) 5 year, 4% coupon bond with quarterly coupon...

BBC has just issued a callable (at par) 5 year, 4% coupon bond with quarterly coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $108per $100 face value. What is the bond's yield to call?

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Answer 1

Answer #1

Using financial calculator
PV=-108
N=2*4
PMT=4%*100/4
FV=100
CPT I/Y=0.000%

Hence, yield to call is 0%

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Answer 2

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