Suppose Allied Company's bonds had a deferred call provision that permitted the company, if it desired, to
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Question:
Suppose Allied Company's bonds had a deferred call provision that permitted the company, if it desired, to call them 10 years after their issue date at a price of $1,100. Suppose further that market interest rate had fallen and that 1 year after issuance, the going market interest rate had declined, causing their price to rise to $1,494.93. What is the yield to call (YTC)?
a. 4.21%
b. 75%
c. 9.6%
d. 10.0%
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt , Eugene F. Brigham
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