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Livorno Corporation has a series of bonds that matures in 14 years. The bonds have an...

Livorno Corporation has a series of bonds that matures in 14 years. The bonds have an 8 percent semiannual coupon and a par value of $1,000. The bonds are callable in five years at a call price of $1,050. The price of the bonds today is $1,075. What is the bonds’ yield to maturity and yield to call?

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Answer #1

N= 28, FV = 1000, PMT = 40, PV = -1075

use rate funciton in Excel and multiply by 2

yield to maturity = 7.14%

N = 10, PMT = 40, PV = -1075, FV = 1050

use rate function and multiply by 2

yield to call = 7.05%


answered by: ANURANJAN SARSAM
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