Register
A company issues a 10-year, callable bond at par with 8% annual coupon payments. The bond can be called at par in one year after issue or any time after that on a coupon payment date. The call price is
152k views
2 votes
A company issues a 10-year, callable bond at par with 8% annual coupon payments. The bond can be called at par in one year after issue or any time after that on a coupon payment date. The call price is $108 per $100 of face value. What is the yield to call if this bond is called in one year

User Su
by
5.7k points

1 Answer

7 votes

Answer:

the yield to call is 9%

Step-by-step explanation:

The computation of the yield to call is as follows:

Given that

NPER is 10 year

PMT = $100 × 8% = $8

FV = $108

PV = $100

The formula is shown below:

= RATE(NPER,PMT,PV,FV,TYPE)

after applying the above formula, the yield to call is 9%

A company issues a 10-year, callable bond at par with 8% annual coupon payments. The-example-1
User Nucleic Electron
by
5.6k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.8m questions

7.5m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!