Question

cayon Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000...

cayon Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000 par value. The bond has a 6.50% nominal yield to maturity, but it can be called in 10 years at a price of $1,050. What is the bond's nominal yield to call?

*Mention the excel functions you used and the value of each input you entered.

Homework Answers

Answer #1

*Any doubt please comment

YTC = 6.22%

Excel workings:

PMT 43.75 [1000*8.75%*1/2]
NPER 30 [15 years*2]
PV 1000
Rate 3%
PV $1,213.55 rate [ nper,pmt, pv,fv]
PMT 43.75 [1000*8.75%*1/2]
NPER 20 [10 years*2]
PV $1,213.55
FV $1,050.00
Rate 3.11% rate [ nper,pmt, pv,fv]
YTC 6.22%

Excel:

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