What is the bond's yield to maturity and yield to call?

label Business
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

Three years ago, Jack's Automotive Jacks issued a 20-year callable bond with a $1000 maturity value and a 8.5 percent coupon rate of interest.  Interest is paid semiannually.  The bond is currently selling for $1046.

A) What is the bond's yield to maturity?

B) If the bond can be called in four years for a redemption price of $1085, what is the bond's yield to call?  

Apr 2nd, 2015

A

Market price $1,046.00
Par value $1,000.00
Interest 8.50%
Frequency 2
N(Years) 17
YTM 8.00%
B

Market price $1,046.00
Par value $1,000.00
Redemption at call $1,085.00
Interest 8.50%
Frequency 2
N(Years) 4
Yield to call 8.92%

Apr 2nd, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Apr 2nd, 2015
...
Apr 2nd, 2015
Sep 22nd, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer