Question

Thatcher Corporation's bonds will mature in 17 years. The bonds have a face value of $1,000...

Thatcher Corporation's bonds will mature in 17 years. The bonds have a face value of $1,000 and an 11% coupon rate, paid semiannually. The price of the bonds is $1,050. The bonds are callable in 5 years at a call price of $1,050. Do not round off intermediate. Round your answers to two decimal places.

Homework Answers

Answer #1

YTM is the rate at which PV of Cash Inflows are equal to PV of Cash Outflows

YTM is 0.052 per six months & 0.1040 i.e 10.4% per anum

YTC is 11% as Price of Bond & call price are equal, YTC equals to Coupon amount.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Thatcher Corporation's bonds will mature in 17 years. The bonds have a face value of $1,000...
Thatcher Corporation's bonds will mature in 17 years. The bonds have a face value of $1,000 and an 11% coupon rate, paid semiannually. The price of the bonds is $1,050. The bonds are callable in 5 years at a call price of $1,050. Do not round off intermediate. Round your answers to two decimal places. What is their yield to maturity? % What is their yield to call? %
Thatcher Corporation's bonds will mature in 11 years. The bonds have a face value of $1,000...
Thatcher Corporation's bonds will mature in 11 years. The bonds have a face value of $1,000 and an 9% coupon rate, paid semiannually. The price of the bonds is $1,050. The bonds are callable in 5 years at a call price of $1,050. Do not round off intermediate. Round your answers to two decimal places. a) What is their yield to maturity? b) What is their yield to call?
Yield to Maturity and Call with Semiannual Payments Thatcher Corporation's bonds will mature in 10 years....
Yield to Maturity and Call with Semiannual Payments Thatcher Corporation's bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,050. Do not round intermediate calculations. Round your answers to two decimal places. What is their yield to maturity?   % What is their yield to call?   %
1. Yield to Maturity and Required Returns The Brownstone Corporation's bonds have 5 years remaining to...
1. Yield to Maturity and Required Returns The Brownstone Corporation's bonds have 5 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8% What is the yield to maturity at a current market price of $1,062? Round your answer to two decimal places. 2. Yield to Maturity and Call with Semiannual Payments Thatcher Corporation's bonds will mature in 11 years. The bonds have a face value of $1,000...
A firm's bonds have a maturity of 12 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 6 years at $1,215, and currently sell at a price of $1,379.19. What is their nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. What is their nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. Lourdes Corporation's 12% coupon rate, semiannual payment, $1,000...
Question 2 Thatcher Corporation's bonds will mature in 12 years. The bonds have a face value...
Question 2 Thatcher Corporation's bonds will mature in 12 years. The bonds have a face value of $1,000 and a 7% coupon rate, paid semiannually. The price of the bonds is $1,100. The bonds are callable in 6 years at a call price of $1,060. What is their yield to maturity? What is their yield to call? Question 3 The real risk-free rate of interest is 3%. Inflation is expected to be 2% this year and 3% during the next...
Lourdes Corporation's 12% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 10 years,...
Lourdes Corporation's 12% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 10 years, are callable 6 years from today at $1,050. They sell at a price of $1,306.57, and the yield curve is flat. Assume that interest rates are expected to remain at their current level. What is the best estimate of these bonds' remaining life? Round your answer to two decimal places. If Lourdes plans to raise additional capital and wants to use debt financing, what...
A firm's bonds have a maturity of 10 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 5 years at $1,175.15, and currently sell at a price of $1,313.90. What is their nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. What is their nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places.
A firm's bonds have a maturity of 10 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 5 years at $1,178, and currently sell at a price of $1,320.15. What is their nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is their nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %
A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...
A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1,151.36, and currently sell at a price of $1,278.60. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. What is their YTM? What is their YTC?