1. Eades has 9% annual coupon bonds that are callable and have 18years left until maturity. The...

Question:

1. Eades has 9% annual bonds that are callable and have 18years left until maturity. The bonds have a of $1,000, and their current market price is $1,220.35. However, Eades may call the bonds in eight years at a call price of $1,060.
2. What are the YTM and yield to call on Eades Corp. Bonds?
3. If the interest rates are expected to remain constant, what is the best estimate of the remaining life left for Eades Corp?
4. If Eades issued new bonds today, what rate must the bonds have to be issued at par?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...