7-11

Problem 7-11 Bond yields one year ago Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1 Currently, the bond can be called in 6 years at a price of $1,075, and it now sells for $1,270. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. what is the bond's nominal yield to cal? Do not round intermediate calculations. Round your answer to two decimal places. would an investor be more likely to earn the YTM or the YTC? b. What is the current yield? (Hint: Refer to for the definition of the current yield and to Round your answer to two decimal places. Is this yield affected by whether the bond is likely to be called? 1. If the bond is called, the current yield will remain the same but the capital gains yield will be different. II. If the bond is called, the current yield and the capital gains yield will remain the same. m. If the bond is called, the capital gains yield will remain the same but the current yield wil be different. IV. If the bond is called, the current yield and the capital gains yield will both be different. v, the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different. c, what is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, if reqired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign. le this vield denendent on whether the bond is expected to be called