Assume that a bond has an annual coupon rate of 6.80 percent, but makes coupon payments...

  

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Assume that a bond has an annual coupon rate of 6.80 percent, but makes coupon payments on a semi-annual basis, has a par value of $1,000, a yield to maturity of 7.20 percent, and a current price of $965.081814107. Given this information, determine how many years it will be before this bond matures. Assume that five years ago a firm issued a 30-year, $1,000 par value bond that had an annual coupon rate of 8.00 percent (but makes semi-annual coupon payments). Also assume that the bond's current nominal annual yield-to-maturity is 10.0 percent. Now assume that the firm has the option of calling this bond in another 5 years (when the bond will be a 20-year bond), but at a call price of $1,160. Given this information, determine the current yield-to-call for this bond. Assume that a bond has an annual coupon rate of 6.80 percent, but makes coupon payments on a semi-annual basis, has a par value of $1,000, a yield to maturity of 7.20 percent, and a current price of $965.081814107. Given this information, determine how many years it will be before this bond matures. Assume that five years ago a firm issued a 30-year, $1,000 par value bond that had an annual coupon rate of 8.00 percent (but makes semi-annual coupon payments). Also assume that the bond's current nominal annual yield-to-maturity is 10.0 percent. Now assume that the firm has the option of calling this bond in another 5 years (when the bond will be a 20-year bond), but at a call price of $1,160. Given this information, determine the current yield-to-call for this bond.

Answer rating: 100% (QA)

Solution To determine the number of years until the bond matures we can use the formula Years to Mat... View the full answer