Problem $18-26$ Make$-$Whole Call Premium $($LO$2,$ CFA$5)$

Assume that Kendal Corp. has an outstanding bond issue with a par value of $$1,000$ and a current market price of $$1,042\mathrm{.}70$ per bond.

The bond has nine years remaining and a coupon rate of $6$ percent. $($Use Excel to answer this question. Enter your answer as a

percent rounded to $2$ decimal places.$)$

a$.$ Find the current yield to maturity for the Kendal Corp. bond. $($Do not round intermediate calculations. Enter your answer as a

percent rounded to $2$ decimal places.$)$

Yield to maturity

b$.$ If the bond trades at a yield spread of $2\mathrm{.}30$ percent above comparable U$.$S$.$ Treasury notes, what must the current yield on Treasury

notes be$?($Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.$)$

Treasury yield

c$.$ If the Kendal bond has a make$-$whole call premium of $140$ basis points above the U$.$S$.$ Treasury rate, what is the make$-$whole call

premium? $($Do not round intermediate calculations. Enter the make$-$whole yield answer as a percent rounded to $2$ decimal places.

Enter the make$-$whole price answer in dollars rounded to $2$ decimal places.$)$