What would be the yield to call if the call can be made in 3 years...

Question

Question

What would be the yield to call if the call can be made in 3 years...

What would be the yield to call if the call can be made in 3 years at a price of $1,100 on a bond currently priced at $1,050 with a 5% coupon rate and $1,000 par value?

A. 6.23%
B. 6.25%
C. 3.24%
D. 3.22%

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Years to call(nper) = 3 years

Price of the bond (PV) = 1050

Par value of the bond = 1000

Annual coupons (PMT) = 5% * 1000 = 50

Call price (FV) = 1,100

Yield to call (rate) = = 6.25%

Answer is B ) 6.25%

Add a comment

Answer 2

Similar Homework Help Questions

What would be the yield to call if the call can be made in 3 years...

What would be the yield to call if the call can be made in 3 years at a price of $1,100 on a bond currently priced at $1,050 with a 5% coupon rate and $1,000 par value? A. 6.23% B. 6.25% C. 3.24% D. 3.22%
1. What is the yield to maturity for a $1,000 par, 15 year, 8% coupon bond...

1. What is the yield to maturity for a $1,000 par, 15 year, 8% coupon bond with annual payments, callable in 3 years for $1,050 that sells for $950? A. 8.61% B. 11.55% C. 3.22% D. 3.77% 2. What is the yield to call for a $1,000 par, 15 year, 8% coupon bond with annual payments, callable in 3 years for $1,050 that sells for $950? A. 11.55% B. 3.77% C. 8.61% D. 3.22% 3. What is the yield to...
-What is the yield to call of a 30-year to maturity bond that pays a coupon...

-What is the yield to call of a 30-year to maturity bond that pays a coupon rate of 11.98 percent per year, has a $1,000 par value, and is currently priced at $918? The bond can be called back in 7 years at a call price $1,089. Assume annual coupon payments. -Marco Chip, Inc. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 17 years and a yield to maturity of 10.23 percent,...

Assume a bond with the following parameters: What is it's Yield to Maturity? Par Value $1,000 Call Premium $75 Coupon Rate 6.00% Payments are Made Semi-Annually Years to Maturity 20 Years to Call...

Assume a bond with the following parameters: What is it's Yield to Maturity? Par Value $1,000 Call Premium $75 Coupon Rate 6.00% Payments are Made Semi-Annually Years to Maturity 20 Years to Call 10 Current Market Price $1,200
7. Mides cooperation bonds mature in 3 years and have a yield to ma of the...

7. Mides cooperation bonds mature in 3 years and have a yield to ma of the bond is 1000. The bond have a 10% coupon the What is the capital gain yield closs) on this bond? a, 9.625% b. 1.125% b. 8.5% d. 1.125% a yield to maturity of 8.5%. The par value coupon rate and pay interest on semiannual basis. 8. A ten year bond is currently selling for S1037 and has vield to maturity of 6.23%, what is...
A(n) 8.0%, 25-year bond has a par value of $1,000 and a call price of $1,075....

A(n) 8.0%, 25-year bond has a par value of $1,000 and a call price of $1,075. (The bond's first call date is in 5 years.) Coupon payments are made semiannually (so use semiannual compounding where appropriate). a. Find the current yield, YTM, and YTC on this issue, given that it is currently being priced in the market at $1,200. Which of these 3 yields is the highest? Which is the lowest? Which yield would you use to value this bond?...

Yield To Maturity. A firm’s bonds have a maturity of 10 years with a $1,000 face...

Yield To Maturity. A firm’s bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,050, and currently sell at a price of $1,100. What are their nominal yield to maturity and their nominal yield to call? Show detailed calculations
What is the yield to call for a $1,000 par, 20-year, 8% coupon bond with annual...

What is the yield to call for a $1,000 par, 20-year, 8% coupon bond with annual payments, callable in 2 years at a call price of $1,100 that sells for $1,200. A. 1.72% B. 2.55% C. 3.44% D. 2.81%
What would be the realized return if the investor believes the bond can be sold in...

What would be the realized return if the investor believes the bond can be sold in three years at a price of $1050 on a bond currently priced at $975 with a 4% coupon rate, $1,000 par value, and seven years until maturity? A. 6.51% B. 4.91% C. 5.03% D. 6.47%

7. Mides cooperation bonds mature in 3 years and have a yield tom of the bond...

7. Mides cooperation bonds mature in 3 years and have a yield tom of the bond is $1000. The bond have a 10% coupon Tate What is the capital gain yield (loss) on this bond? a, 9.625% b. 1,125% b. 8.5% d. 1.125% have a yield to maturity of 8.5%. The par value coupon rate and pay interest on semiannual basis. 8. A ten year bond is currently selling for $1037 and has yield to maturity of 6.23%, W coupon...

What would be the yield to call if the call can be made in 3 years...

Homework Answers