Question

a) Sadik Inc.'s bonds currently sell for $1,200 and have a par value of $1,000. They...

a) Sadik Inc.'s bonds currently sell for $1,200 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)?

a.

7.31%
b.

6.31%
c.

4.31%
d.

5.31%
e.

8.31%

b) Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The going annual interest rate (r d) is 8.00%, based on semiannual compounding. What is the bond’s price?

a.

$673.29
b.

$935.15
c.

$788.63
d.

$805.01
e.

$1,235.47
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