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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.

What is their yield to maturity?
%

What is their yield to call?
%

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Answer #1
Yield to maturity 10.37% Yield to Call 10.48%
Working: Working:
Semi annual period to maturity 34 Semi annual period to call 10
Face Value $       1,000 Call Price $    1,050
Semi annual coupon $             55 Semi annual coupon $          55
Current Price $       1,050 Current Price $    1,050
Yield to maturity = =RATE(E5,E7,-E8,E6)*2 Yield to maturity = =RATE(L5,L7,-L6,L8)*2
= =RATE(34,55,-1050,1000)*2 = =rate(10,55,-1050,1050)*2
= 10.37% = 10.48%
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