a) copoun rate = 10% , Fcae value of both the bond = $1000.00
Duration = 2 years for both the bond
Copoun amount = 10%*1000=$100
We need to calculate Yield to Maturity after one year
YTM For callable bond:
YTM =[Interest +( Issue price - current price)/Duration]/[(Issue price + current price )/2] *100
=[100+(1000-970)/1] / [(1000+970)/2] * 100
= 13.20% approx
Current price of callable bond = 100PVIFA(13.20%,2) + 1000PVIF(13.20%,2)
= $(100*1.6638 + 1000*.780)
= $946.38 approx
Puttable Bond:
Issue price = $1000 Cuurent price = $1020
Copoun amount = 10%*1000
= $100
YTM For puttable bond:
YTM = [100+(1000-1020)/1] / [(1000+1020)/2]*100
= 7.92%
Current price of puttable bond = 100 PVIFA(7.92%,2) + 1000PVIF(7.92%,2)
=$( 100*1.7852 + 1000*.8586)
= $(178.52 + 858.60)
= $1037.12 approx
Consider hypothetical Callable bond (C) and Putable bond of XYZ Corporation. All bonds in this question...
XYZ Corporation has just issued a callable (at Par) three year 7% coupon with semi-annual 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 $98. What is the bond's yield to maturity and yield call? a. The yield to maturity is B. what is the yield to call
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...
Question 8 Aspen Company's non-callable bonds currently sell for $900. They have a 15-year maturity, an annual coupon of $70, and a par value of $1,000. What is their yield to maturity? Your answer should be between 6.65 and 8.80, rounded to 2 decimal places, with no special characters. Question 9 Micron Technology's bonds currently sell for $1.210 and have a par value of $1,000. They pa 105 annual coupon and have a 15-year maturity, but they can be called...
General Electric has just issued a callable (at par) 10-year, 6.1 % coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $ 101.64. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst?
General Electric has just issued a callable (at par) 10-year, 6.5% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $101.77. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst?
Boeing Corporation has just issued a callable at par) three-year, 5.3% coupon bond with semi-annual 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 $99.49. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst?
Boeing Corporation has just issued a callable (at par) three-year, 5.4% coupon bond with semi-annual 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 $99.46. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst?
Lloyd Corporation's annual pay, $1000 par value bonds, which mature in 12 years, are callable in 7 years from today at $1020, the annual coupon payment is $120. They sell at a price of $1400. a) What is the bond's Yield to Maturity? b) What is the bond's Current Yield? c) What is the bond's Yield to Call? d) What is the bond's Coupon Rate? e) What is the bond's Selling Price if the payments are semiannual? right answers will...
2) A company issues a callable (at par) ten-year, 6% coupon bond with annual coupon payments. The bond can be called at par in one year after release or any time after that on a coupon payment date. On release, it has a price of $104 per $100 of face value. What is the yield to worst of this bond when it is released? 3) A company issues a callable (at par) ten-year, 6% coupon bond with annual coupon payments....
General Electric has just issued a callable (at par) 10-year, 6.4% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $102.01. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst? rui a. What is the bond's yield to maturity? The bond's yield to maturity is % (Round...