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Compute the bond’s current yield based on the last traded price of $1,016.20.

Compute the bond’s current yield based on the last traded price of $1,016.20.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Compute the bond’s current yield based on the last traded price of $1,016.20.

CENTRAL BANK OF TRINIDAD & TOBAGO RESULTS OF THE AUCTION OF THE GOVERNMENT OF TRINIDAD AND TOBAGO TT$600 MILLION 6.50% FIXED RATE BOND DUE 2025 The auction of the Government of Trinidad and Tobago $600 million 15-year 6.50% bond issued on February 9, 2010 has been oversubscribed, with the total bids received amounting to $2,087.641 million. Due to this overwhelming response, the bond was allotted at a premium, with a clearing price of $104.90 per $100.00 face value, offering investors a yield to maturity of 6.00 per cent. Bids at this price were pro-rated to allocate approximately seventy (70) per cent of the amount applied for, while competitive bids submitted at a price lower than this were rejected. Successful competitive bidders, as well as non-competitive bidders, are required to pay the clearing price for the bond. Full details of the results of the auction are outlined below: Issue Date February 9, 2010 Maturity Date February 9, 2025 Tenor 15 Years Total Amount Applied for $2,087,641,000.00 Total Amount Offered $600,000,000.00 Total Amount Allotted $600,000,000.00 Issue Yield 6.00% Coupon Rate 6.50% Cut-Off Price $104.90 Range of Successful Bids $112.87 - $104.90 Amount Allotted to Non-Competitive Applications $17,228,000.00
Transcribed Image Text:CENTRAL BANK OF TRINIDAD & TOBAGO RESULTS OF THE AUCTION OF THE GOVERNMENT OF TRINIDAD AND TOBAGO TT$600 MILLION 6.50% FIXED RATE BOND DUE 2025 The auction of the Government of Trinidad and Tobago $600 million 15-year 6.50% bond issued on February 9, 2010 has been oversubscribed, with the total bids received amounting to $2,087.641 million. Due to this overwhelming response, the bond was allotted at a premium, with a clearing price of $104.90 per $100.00 face value, offering investors a yield to maturity of 6.00 per cent. Bids at this price were pro-rated to allocate approximately seventy (70) per cent of the amount applied for, while competitive bids submitted at a price lower than this were rejected. Successful competitive bidders, as well as non-competitive bidders, are required to pay the clearing price for the bond. Full details of the results of the auction are outlined below: Issue Date February 9, 2010 Maturity Date February 9, 2025 Tenor 15 Years Total Amount Applied for $2,087,641,000.00 Total Amount Offered $600,000,000.00 Total Amount Allotted $600,000,000.00 Issue Yield 6.00% Coupon Rate 6.50% Cut-Off Price $104.90 Range of Successful Bids $112.87 - $104.90 Amount Allotted to Non-Competitive Applications $17,228,000.00
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