Question

A 20-year, 8% annual coupon bond with a par value of $1,000 may be called in...

A 20-year, 8% annual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.)
Basic Input Data:
Years to maturity: 20
Periods per year: 1
Periods to maturity: 20
Coupon rate: 8%
Par value: $1,000
Periodic payment: $80
Current price $1,100
Call price: $1,040
Years till callable: 5
Periods till callable: 5
a.   What is the bond's yield to maturity? 7.05%
b.   What is the bond's current yield? 7.69%
d.   What is the bond's yield to call? 7.27%

Please check my answers and shoe work!!!!

Homework Answers

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
An 8% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in...
An 8% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in 7 years at a call price of $1,200. If the bond is selling today for $900, the yield to call is closest to
A $1,000 par, 8%, 10 year bond, which pays semiannual coupons. The bond is callable in...
A $1,000 par, 8%, 10 year bond, which pays semiannual coupons. The bond is callable in 5 years at a call price of $1,050. If the current price of the bond is $1,100, what is its yield to maturity (YTM)?
A 14-year, 14% semiannual coupon bond with a par value of $1000 may be called in...
A 14-year, 14% semiannual coupon bond with a par value of $1000 may be called in 5 years at a call price of $1030. The bond sells for $1150 (assume the bond has just been issued). a. What is the bond's yield to maturity? b. What is the bond's current yield? c. What is the bond's capital gain or loss yield? d. What is the bond's yield to call?
A callable bond with a $1,000 par value and a 7.5% coupon rate pays interest semiannually....
A callable bond with a $1,000 par value and a 7.5% coupon rate pays interest semiannually. The bond matures in 20 years but is callable in 5 years at a price of $1,100. Today, the bond sells for $1,055.84. What is this bond’s yield to call expressed as a bond equivalent yield? 3.49% 3.90% 6.18% 6.98% 7.80%
1. Analyze the 20-year, 8% coupon rate (Semi-annual payment), $1,000 par value bond. The bond currently...
1. Analyze the 20-year, 8% coupon rate (Semi-annual payment), $1,000 par value bond. The bond currently sells for $1,218. What's the bond's yield to maturity? A. 5.06% B. 5.68% C. 5.38% D. 6.10% 2. Analyze the 20-year, 8% coupon rate (Semi-annual payment), $1,000 par value bond. The bond currently sells for $1,218. What's the bond's current yield, and capital gain yield? (Please show your work) A. 6.57%, -0.47% B. 6.07%, -0.69% C. 6.57%, -0.47% D. 6.07%, 0.69%
What is the yield to maturity for a $1,000 par, 20 year, 8% coupon bond with...
What is the yield to maturity for a $1,000 par, 20 year, 8% coupon bond with semiannual payments, callable in 3 years for $1,050 that sells for $907.99?
- Nesmith Corporation's outstanding bonds have a $1,000 par value, an 8% semiannual coupon, 9 years...
- Nesmith Corporation's outstanding bonds have a $1,000 par value, an 8% semiannual coupon, 9 years to maturity, and a 10% YTM. What is the bond's price? - A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,054.06, and currently sell at a price of $1,105.17. What are their nominal yield to maturity and their nominal yield to call?
3) A bond currently sells for $850.  It has an eight-year maturity, an annual coupon of $80...
3) A bond currently sells for $850.  It has an eight-year maturity, an annual coupon of $80 but paid semi-annually, and a par value of $1,000. This bond has a callable feature. If this bond can be called after 5 years, for $1,025. (1) What is its annual yield to maturity?   (2) What is its current yield?     (3) What is the bond’s nominal yield to call (YTC)? (4)   If you bought this bond, would you be more likely to earn the YTM...
Bond 1 Coupon rate 6% Annual coupon frequency 2 Par $1,000 Time to maturity (years) 10...
Bond 1 Coupon rate 6% Annual coupon frequency 2 Par $1,000 Time to maturity (years) 10 2. (10 points) Compute the following yields: a) the yield to maturity for Bond 1, above, if the current bond price is $875. b) the yield to call for Bond 1 if its current price is $1050 and it is callable in 4 years at a value of par plus one year’s coupon interest.
•A 20-year, $1,000 par value bond has an 6.5% annual payment coupon. The bond currently sells...
•A 20-year, $1,000 par value bond has an 6.5% annual payment coupon. The bond currently sells for $1025. If the yield to maturity remains at its current rate, what will the price be 8 years from now?