A 30-year maturity, 8.3% coupon bond paying coupons semiannually is callable in five years at a call price of $1,115. The bond currentlysells at a yield to maturity of 7.3% (3.65% 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 $1,065? (Do not round intermediate calculations. Round your answer to 2 decimalplaces.)Yield to call%c. What is the yield to call if the call price is $1,115 but the bond can be called in two years instead of five years? (Do not roundintermediate calculations. Round your answer to 2 decimal places.)

Solution:(a) :(b) :(c) :I hope this solution helps you, thanks!

Answered: A 30-year maturity, 8.3% coupon bond…

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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