As per rules I am answering the first 4 subparts of the question
1: Using financial calculator
Input: FV= 1000,N = 20, PMT=14%*1000/2 = 70
PV = -1300
Solve for I/Y as 4.661357
YTM = 4.661357%*2
= 9.32%
2: : Using financial calculator
Input: FV= 1060,N = 12, PMT=14%*1000/2 = 70
PV = -1300
Solve for I/Y as 4.167734
YTC = 4.167734%*2 = 8.34%
3: YTC
The investor is likely to earn YTC since it is lesser than YTM and so the bond is likely to be called.
4: Current yield = annual coupon/ Price
= 140/ 1300
= 10.77%
eBook Problem Walk-Through Last year Carson Industries issued a 10-year, 14 % semiannual coupon bond at...
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7.11
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Label answers a, b, c
Last year Carson Industnes issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be caled in 6 years at a pnce of $1,065 and it sells for $1,200. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two...
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