Brooks Inc.'s callable bonds are currently selling for $1,300. They pay a coupon rate of 10% annually, have 10 years to maturity, and a $1,000 par value. The earliest that the bonds can be called is 3 years from now for a call price of $1,200. What is the Yield to Call?
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- Huion Inc. bonds will mature in 10 years. The bonds have a face value of $1,000 and an 5% coupon rate, paid semiannually. The price of the bonds is $1,000.The bonds are callable in 4 years at a call price of $1100. What is their yield to maturity? What is their yield to call? Please show work and explain.Phil Manufacturing, Inc. bonds have a face value of $1,000, a coupon rate of 6.5 percent, semiannual interest payments, and mature in 19 years. What is the current price of these bonds if the yield to maturity is 6.65 percent? Can the calculator and excel solution be provided?Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 10% annual coupon payment, and their current price is $1,175. The bonds may be called in 5 years at 109% of face value (Call price = $1,090). What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. What is the yield to call if they are called in 5 years? Do not round intermediate calculations. Round your answer to two decimal places.
- Pharaoh, Inc. has four-year bonds outstanding that pay a coupon rate of 7.0 percent and make coupon payments semiannually. If these bonds are currently selling at $918.32. What is the yield to maturity that an investor can expect to earn on these bonds? Assume face value is $1000. (Round to 1 decimal) Solve for yield to maturity What is the effective annual yield?Kempton Enterprises has bonds outstandingwith a $1,000 face value and 10 years left until maturity. They have an 11% annual couponpayment, and their current price is $1,185. The bonds may be called in 5 years at 109% offace value (Call price = $1,090).a. What is the yield to maturity?b. What is the yield to call if they are called in 5 years?c. Which yield might investors expect to earn on these bonds? Why?d. The bond’s indenture indicates that the call provision gives the firm the right to callthe bonds at the end of each year beginning in Year 5. In Year 5, the bonds may becalled at 109% of face value, but in each of the next 4 years, the call percentage willdecline by 1%. Thus, in Year 6, they may be called at 108% of face value; in Year 7,they may be called at 107% of face value; and so forth. If the yield curve is horizontaland interest rates remain at their current level, when is the latest that investors mightexpect the firm to call the bonds?Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is $1,185. The bonds may be called in 5 years at 109% of face value (Call price=$1,090). a. What is the yield to maturity? b. What is the yield to call if they are called in 5 years? c. Which yield might investors expect to earn on these bonds? Why? d. The bond’s indenture indicates that the call provision gives the firm the right to call the bonds at the end of each year beginning in Year 5. In Year 5, the bonds may be called at 109% of face value; but in each of the next 4 years, the call percentage will decline by 1%.Thus, in Year 6, they may be called at 108% of face value; in Year 7, they may be called at 107% of face value; and so forth. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firmto call the bonds?
- John Enterprises has bonds outstanding with $1,000 face value and 10 years left until matyrity. The have 11% annual coupon payment, and their current price is $1,185. The bonds may be called in 5 years at 109% of face value (Call price = $1,090). a. What is the yield to maturity? b. What is the yield to call if they are called in 5 years? c. Which yield might investors expect to earn on these bonds? Why? d. The bond’s indenture indicates that the call provision gives the firm the right to callthe bonds at the end of each year beginning in Year 5. In Year 5, the bonds may becalled at 109% of face value, but in each of the next 4 years, the call percentage willdecline by 1%. Thus, in Year 6, they may be called at 108% of face value; in Year 7,they may be called at 107% of face value; and so forth. If the yield curve is horizontaland interest rates remain at their current level, when is the latest that investors mightexpect the firm to call the bonds?BEST Company bonds are yielding 12% and will mature in 10 years from now.The coupon rate is 14% and are paid semiannually. The bonds have a parvalue of $1,000 and the coupons are paid semiannually. If the bond would be selling for $1200, will the bond be yielding more than, less than or equal to the current yield of 12%? Why?Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 6.5%, payable annually, and a par value of $1,000. The 1-year interest rate is 6.5%. Next year, there is a 35% probability that interest rates will increase to 8% and a 65% probability that they will fall to 5%. What will the market value of these bonds be if they are noncallable?
- Thatcher Corporation’s bonds will mature in 10 years. The bonds have a facevalue of $1,000 and an 8% coupon rate, paid semiannually. The price of thebonds is $1,100. The bonds are callable in 5 years at a call price of $1,050.What is their yield to maturity? What is their yield to call?Taussig Corp.'s bonds currently sell for $1,220. They have a 6.35% annual coupon rate and a 20-year maturity, but they can be called in 5 years at $1,050. What rate of return should an investor expect to earn if he or she purchases these bonds?Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have a 10% annual coupon payment, and their current price is $1,170. The bonds may be called in 5 years at 109% of face value (Call price = $1,090). a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % b. What is the yield to call if they are called in 5 years? Do not round intermediate calculations. Round your answer to two decimal places. % c. Which yield might investors expect to earn on these bonds? Why? I. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. III. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. IV. Investors would expect the bonds to be called and to earn the YTC because…