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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.

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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.

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