Question

Bond Valuation Assume that you are considering the purchase of a 20-year, non- callable bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 8.4% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? Yield to Maturity Radoski Corporation's bonds make an annual coupon interest payment of 7.35%. The bonds have a par value of $1,000, a current price of $1,130, and mature in 12 years. What is the yield to maturity on these bonds? Yield to Call Sadik Inc.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)?

Answer 1

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Take BAll calculator and do following 40 N 1000 FV Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Key in Press Key in Press Key in Press Key in Press Press 47.5 PMT 4.2 1/Y CPT Step 10 Press PV Bond price -$1,105.69

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