17 years ago, you bought a bond just after it paid its semiannual coupon. The bond had...
Question:
17 years ago, you bought a bond just after it paid its semiannual coupon. The bond had a coupon rate of 5.6%, a face value of $1,000 and a yield to maturity of 3.2%. It bond had 17 years to maturity, i.e., it matures now.
If you didn't reinvest any of the coupons, what was the realized rate of return over the 17 years?
2-A GM and a Ford bond both have 4 years to maturity, a $1,000 par value, a BB rating and pay interest semiannually. GM has a coupon rate of 6.4%, while Ford has a coupon rate of 5.7%.
The GM bond trades at 89.57 (percent of par). What is the yield to maturity (YTM)?
3-A corporate bond pays interest twice a year and has 21 years to maturity, a face value of $1,000 and a coupon rate of 6.1%. The bond's current price is $1,476.4. It is callable starting 15 years from now (years to call) at a call price of $1,098
What is the bond's (annualized) yield to maturity?
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham