2. A 30-year maturity, 10% coupon bond paying coupons semiannually is callable in 15 years at a call price of $1,100. The bond currently sells at a yield to maturity of 8% (4% per half-year). a. What is the yield to call? b. What is the yield to call if the call price is only $1,050? c. What is the yield to call if the call price is $1,100, but the bond can be called in 10 years instead of 15 years?

2. A 30-year maturity, 10% coupon bond paying coupons semiannually is callable in 15 years at a call price of $1,100. The bond currently sells at a yield to maturity of 8% (4% per half-year). a. What is the yield to call? b. What is the yield to call if the call price is only $1,050? c. What is the yield to call if the call price is $1,100, but the bond can be called in 10 years instead of 15 years?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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