A bond has a $1,000 par value, 12 years to maturity, and pays a coupon of 7.25% per year, semiannually. The bond is callable in seven years at 110% of its par value. If the bond’s yield to maturity is 7.02% per year, what is its yield to call? A) 7.59% B) 7.68% C) 7.84% D) 8.00% E) 7.76%

A bond has a $1,000 par value, 12 years to maturity, and pays a coupon of 7.25% per year, semiannually. The bond is callable in seven years at 110% of its par value. If the bond’s yield to maturity is 7.02% per year, what is its yield to call? A) 7.59% B) 7.68% C) 7.84% D) 8.00% E) 7.76%

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 1P

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