A 20-year maturity, 7.6% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,170. The bond currently sells at a yield to maturity of 6.6% (3.30% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call b. What is the yield to call if the call price is only $1,120? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % Yield to call % c. What is the yield to call if the call price is $1,170 but the bond can be called in four years instead of seven years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) %
A 20-year maturity, 7.6% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,170. The bond currently sells at a yield to maturity of 6.6% (3.30% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call b. What is the yield to call if the call price is only $1,120? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % Yield to call % c. What is the yield to call if the call price is $1,170 but the bond can be called in four years instead of seven years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...
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![A 20-year maturity, 7.6% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,170. The bond
currently sells at a yield to maturity of 6.6% (3.30% per half-year).
Required:
a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Yield to call
b. What is the yield to call if the call price is only $1,120? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Yield to call
%
Yield to call
%
c. What is the yield to call if the call price is $1,170 but the bond can be called in four years instead of seven years? (Do not round
intermediate calculations. Round your answer to 2 decimal places.)
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe85aa758-0c3f-495b-80c0-4ec975b6fc47%2F280145f4-24a8-4483-bd63-ecc689f6b583%2F780hxd_processed.png&w=3840&q=75)
Transcribed Image Text:A 20-year maturity, 7.6% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,170. The bond
currently sells at a yield to maturity of 6.6% (3.30% per half-year).
Required:
a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Yield to call
b. What is the yield to call if the call price is only $1,120? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Yield to call
%
Yield to call
%
c. What is the yield to call if the call price is $1,170 but the bond can be called in four years instead of seven years? (Do not round
intermediate calculations. Round your answer to 2 decimal places.)
%
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