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?
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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