Question

Mud Outfitters, Incorporated issued 9%, 30 year Bonds 5 Years ago. The bonds have a par...

  1. Mud Outfitters, Incorporated issued 9%, 30 year Bonds 5 Years ago. The bonds have a par value of $1,000 and pay interest semi-annually. The bonds have a 10 year deferred call and offer a call premium equal to 6 months interest. The Bonds are currently price at $1,125.
  2. What is the yield to maturity of the Mud Outfitters Bonds?
  3. What is the yield to call on the Mud Outfitters Bonds?
  4. If you were to buy these bonds, which yield would you most likely realize? Explain.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

If i were to buy this bond i will probably realize 6.78% because the yield to call is less than yield to maturity so the company will call back bonds for sure.

Please upvote if satisfied

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
please solve with an explanation. thank you! Cinqua Terra Incorporated issued 10-year bonds three years ago...
please solve with an explanation. thank you! Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 8.00% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,051.00. Given your answer to the 6-month return, what is the yield to maturity (as an EAR) for holding the bond?
Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.50% APR....
Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.50% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,127.00. What is the 6-month return for holding the bonds until maturity? Given your answer to the 6-month return, what is the yield to maturity (as an APR AND as an EAR) for holding the bond? Please indicate the calculations...
Boliver Basic Industries (BBI) issued $1,000 12-year bonds 3 years ago. The bonds make quarterly coupon...
Boliver Basic Industries (BBI) issued $1,000 12-year bonds 3 years ago. The bonds make quarterly coupon payments and have a coupon rate of 8%. Bonds of similar risk and maturity offer a yield-to-maturity of 7% APR (compounded semi-annually). What is the value of a BBI bond?
Six years ago, your firm issued $1,000 par, 25-year bonds, with a 8% coupon rate and...
Six years ago, your firm issued $1,000 par, 25-year bonds, with a 8% coupon rate and a 12% call premium. Assume semiannual compounding. A. If these bonds are now called, what is the actual yield to call for the investors who originally purchased them at par? Do not round intermediate calculations. Round your answer to two decimal places. ___% annually B. If the current interest rate on the bond is 6% and the bonds were not callable, at what price...
One year ago, Alpha Supply issued 5-year bonds at par. The bonds have a coupon rate...
One year ago, Alpha Supply issued 5-year bonds at par. The bonds have a coupon rate of 6 percent and pay interest semi-annually. Today, the market rate of interest on these bonds is 6.5 percent. What is the price of these bonds today? $ Compared to the issue price, by what percentage has the price of these bonds changed?  % (Use a negative to denote a decrease and a positive value to denote an increase)
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds...
Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%. What is the yield to maturity at a current market price of $825? Round your answer to two decimal places. % $1,109? Round your answer to two decimal places. % Six years ago the Templeton Company issued 22-year bonds with a 14% annual coupon rate at their $1,000 par value. The bonds had...
The City of Houston issued 30-year bonds 5 years ago; the bond that has a 4%...
The City of Houston issued 30-year bonds 5 years ago; the bond that has a 4% coupon, has a par value of $1,000 and is selling today at $900. What is the yield to maturity on this bond?
Alco issued a 20 year bond two years ago the coupon rate was 7.10% the bonds...
Alco issued a 20 year bond two years ago the coupon rate was 7.10% the bonds make semi-annual payments the par value is $1,000 the bond sell for 105% of par what is the yield to maturity?
purchased bonds five years ago when they were issued at par. These bonds originally had 30...
purchased bonds five years ago when they were issued at par. These bonds originally had 30 years until maturity, a semi annual coupon payment, a coupon rate of 7% and a par value of $1,000. You want to sell the bonds today, the market rate is now 6%, what is your realized return on these bonds?
four years ago, your firm issued $1,000 par, 25-year bomds, with a 9% coupon rate and...
four years ago, your firm issued $1,000 par, 25-year bomds, with a 9% coupon rate and a 12% call premium. Assume semiannual compounding. A. if these bonds are now called, what is the actual yield to call for the investors who originally purchased them at par? do not round intermeduate calculations. round answer to two decimal places. b. if the current interest rate on the bond is 6% and the bonds were not callable, at what price would each bond...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT