Question

what is would a 25 year callable bond be worth it it was purchased 8 years...

what is would a 25 year callable bond be worth it it was purchased 8 years ago, has a coupon rate of 10% payable annually , and the yield on similar investments is 9%? the call premium is one year's annual interest

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A 30-year U.S. 8% coupon bond with 25 years left to maturity is callable in 16...
A 30-year U.S. 8% coupon bond with 25 years left to maturity is callable in 16 years. The call premium is 9%; if the bond is selling today for $980, what is the yield to call?
A company currently has an 8 years bond that is callable in 3 years from today...
A company currently has an 8 years bond that is callable in 3 years from today with a call premium of 1%. This bond annual coupon rate is 9% paid semi-annually and it is currently selling at $1,020 per share. What is the bond annual yield to call and the bond annual yield to maturity? Also, if general interest rate is expected to remains unchanged, based on comparison between yield to call and yield to maturity that you have calculated,...
A company currently has an 8 years bond that is callable in 3 years from today...
A company currently has an 8 years bond that is callable in 3 years from today with a call premium of 1%. This bond annual coupon rate is 9% paid semi-annually and it is currently selling at $1,020 per share. What is the bond annual yield to call and the bond annual yield to maturity? Also, if general interest rate is expected to remains unchanged, based on comparison between yield to call and yield to maturity that you have calculated,...
A company currently has a 10 years bond that is callable in 2 years from today...
A company currently has a 10 years bond that is callable in 2 years from today with a call premium of 1%. This bond annual coupon rate is 3% paid semi-annually and it is currently selling at $985 per share. What is the bond annual yield to call and the bond annual yield to maturity? Also, if general interest rate is expected to remains unchanged, based on comparison between yield to call and yield to maturity that you have calculated,...
Six years ago, your firm issued $1,000 par, 25-year bonds, with a 8% coupon rate and...
Six years ago, your firm issued $1,000 par, 25-year bonds, with a 8% coupon rate and a 12% call premium. Assume semiannual compounding. A. If these bonds are now called, what is the actual yield to call for the investors who originally purchased them at par? Do not round intermediate calculations. Round your answer to two decimal places. ___% annually B. If the current interest rate on the bond is 6% and the bonds were not callable, at what price...
Three years ago, Jack's automotive issued a 10 year callable bond with a $1000 maturity value...
Three years ago, Jack's automotive issued a 10 year callable bond with a $1000 maturity value and a 7.75% coupon rate of interest. Interest is paid semi- annually. The bond, which matures  in fives years, is currently selling for $1065. A. whist is the bond's yield to maturity? B. If the bond can be called in 2 years for a call price of $1090, which is the bond's yield to call?
Corso Books has just sold a callable bond. It is a​ thirty-year quarterly bond with an...
Corso Books has just sold a callable bond. It is a​ thirty-year quarterly bond with an annual coupon rate of 10​% and ​$1000 par value. The​ issuer, however, can call the bond starting at the end of 8 years. If the yield to call on this bond is 9​% and the call requires Corso Books to pay one year of additional interest at the call ​(4 coupon​ payments), what is the bond price if priced with the assumption that the...
Callable bond. Corso Books has just sold a callable bond. It is a​ thirty-year quarterly bond...
Callable bond. Corso Books has just sold a callable bond. It is a​ thirty-year quarterly bond with an annual coupon rate of 5​% and $5,000 par value. The​ issuer, however, can call the bond starting at the end of 10 years. If the yield to call on this bond is 7​% and the call requires Corso Books to pay one year of additional interest at the call (4 coupon​ payments), what is the bond price if priced with the assumption...
four years ago, your firm issued $1,000 par, 25-year bomds, with a 9% coupon rate and...
four years ago, your firm issued $1,000 par, 25-year bomds, with a 9% coupon rate and a 12% call premium. Assume semiannual compounding. A. if these bonds are now called, what is the actual yield to call for the investors who originally purchased them at par? do not round intermeduate calculations. round answer to two decimal places. b. if the current interest rate on the bond is 6% and the bonds were not callable, at what price would each bond...
You purchased an annual interest coupon bond one year ago that had six years remaining to...
You purchased an annual interest coupon bond one year ago that had six years remaining to maturity at that time. The coupon interest rate was 10% and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT