Company A issued a callable bond 3 years ago. The bond has a face value of $1,000
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Question:
Company A issued a callable bond 3 years ago. The bond has a face value of $1,000 with a 7% coupon rate (semi-annual payment). The current market price of the bond is $1,093 and the bond has 12 years left until maturity.
If you purchase the bond now and the bond is not called, what is your yield to maturity? If you purchase the bond now and the bond is called in 2 years at a call price of $1,035, what will be your yield to call?
Related Book For
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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