A corporate bond pays interest annually and has 3 years to maturity, a face value of $1,000 and a coupon rate of 3.6%. The bond's current price is $1,002.8. It is callable at a call price of $1,050 in one year.What is the bond's yield to maturity? What is the bond's yield to call?
| Yield to maturity | =rate(nper,pmt,pv,fv) | |||||
| = 3.50% | ||||||
| Where, | ||||||
| nper | = | Number of period | = | 3 | ||
| pmt | = | Periodical cash flow | = | 1000*3.6% | = | $ 36.00 |
| pv | = | Initial cash Flow | = | = | $ -1,002.80 | |
| fv | = | Future cash flow | = | = | $ 1,000.00 | |
| Yield to Call | =rate(nper,pmt,pv,fv) | |||||
| = 8.30% | ||||||
| Where, | ||||||
| nper | = | Number of period | = | 1 | ||
| pmt | = | Periodical cash flow | = | 1000*3.6% | = | $ 36.00 |
| pv | = | Initial cash Flow | = | = | $ -1,002.80 | |
| fv | = | Future cash flow | = | = | $ 1,050.00 |
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