Bulldogs Inc. has a P1,200 face value bond with 8 years until maturity. The bond possesses a characteristic of being callable at 105% of the par in year 3. The current price of each bond is P1,300 with 10% annual coupon. What is the approximate yield to maturity? a. 8.12% b. 7.69% c. 8.01% d. 8.53%
Bulldogs Inc. has a P1,200 face value bond with 8 years until maturity. The bond possesses a characteristic of being callable at 105% of the par in year 3. The current price of each bond is P1,300 with 10% annual coupon. What is the approximate yield to maturity? a. 8.12% b. 7.69% c. 8.01% d. 8.53%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
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It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Question
Bulldogs Inc. has a P1,200 face value bond with 8 years until maturity. The bond possesses a characteristic of being callable at 105% of the par in year 3. The current price of each bond is P1,300 with 10% annual coupon. What is the approximate yield to maturity?
a. 8.12%
b. 7.69%
c. 8.01%
d. 8.53%
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