# Question: A Using the facts given in problem 11 what would

a. Using the facts given in problem 11, what would be the yield to call if the call can be made in four years at a price of $1,080? Use Formula 12–3 on page 321.

b. Explain why the answer is lower in part a than in problem 11.

c. Given a call value of $1,080 in four years, is it likely that the bond price would actually get to $1,160?

b. Explain why the answer is lower in part a than in problem 11.

c. Given a call value of $1,080 in four years, is it likely that the bond price would actually get to $1,160?

**View Solution:**## Answer to relevant Questions

a. Using the facts given in problem 11, what would be the anticipated realized yield if the forecast is that the bond can be sold in three years for $1,280? Use Formula 12–4 on page 322. Continue to assume the bond has a ...Assume an investor is trying to choose between purchasing a deep discount bond or a par value bond. The deep discount bond pays 6 percent interest, has 20 years to maturity, and is currently trading at $656.80 with a 10 ...What is the current yield in problem 8? Why is it slightly higher than the yield to maturity? Assume a firm has warrants outstanding that permit the holder to buy one new share of stock at $25 per share. The market price of the stock is now $34. a. What is the intrinsic value of the warrant? b. Why might the warrant ...Assume you bought a convertible bond two years ago for $900. The bond has a conversion ratio of 32. When the bond was purchased, the stock was selling for $25 per share. The bond pays $75 in annual interest. The stock pays ...Post your question