Wildhorse Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent and a yield to maturity of 6.0 percent. Assume face value is $1,000. Problem 8.30(a) Your answer is correct. Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.) Current price $ 1,423
Wildhorse Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent and a yield to maturity of 6.0 percent. Assume face value is $1,000. Problem 8.30(a) Your answer is correct. Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.) Current price $ 1,423
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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am. 114.
Transcribed Image Text:Wildhorse Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent
and a yield to maturity of 6.0 percent. Assume face value is $1,000.
Problem 8.30(a)
Your answer is correct.
Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.)
Current price $
Problem 8.30(b)
Your answer is correct.
If the bonds can be called in five years at a premium of 11.0 percent over par value, what is the investor's realized yield? (Round
answer to 3 decimal places, e.g. 15.255%.)
Realized yield
Problem 8.30(c)
* Your answer is incorrect.
1,423
Realized rate of return
2.812 %
If you bought one of these bonds today, what is your expected rate of return? (Round answer to 2 decimal places, e.g. 15.25%.)
2.81
%
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