Question: can someone help answer (14 marks) YMMV Inc. issues a 25 year bond with a 6.750% coupon and a $45,000,000.00 face value. The yield rate
can someone help answer
(14 marks) YMMV Inc. issues a 25 year bond with a 6.750% coupon and a $45,000,000.00 face value. The yield rate on the bond is 3.000% compounded quarterly. They will set up a sinking fund with quarterly deposits and an interest rate r26) = 5.250%. a) How much are the quarterly deposits into the sinking fund? b) YMMV defaults on the bond at the end of year 21 (But they still make the last coupon payment and sinking fund deposit!). What is the price of the bond at the time they default? c) How much is in the sinking fund at the time of default? How much money do the bondholders end up losing? (They get to keep the sinking fund money.)
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