Question

You are provided with an excerpt from FINRA on a Disney bond with a par value...

You are provided with an excerpt from FINRA on a Disney bond with a par value of $1000 and semi-annual payments. Assume today is 10/15/20.

DISNEY WALT CO

Coupon Rate 3.700 % Maturity Date 10/15/2025

Last Trade Price

$107.82

Last Trade Yield

???????

a) What is the current yield on this bond?

b) What is the YTM on this bond?

c) If the bond is called in 3 years from now at 120% of par, what is the YTC?


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Homework Answers

Answer #1

a)

Current yield:

= Annual coupon payments÷Bond price

= $37/$1,078.20

= 3.43%

Hence, current yield 3.43%

b)

c)

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