Question

A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1100. The bond currently sells at a yield to maturity (YTM) of 7% (3.5% per half-year). What is the yield to call? How does it relate to the YTM? Why?

Answer 1

Bond Price = PV of CFs from it.

Period	CF	PVF @3.5%	Disc CF
1	$      40.00	0.9662	$      38.65
2	$      40.00	0.9335	$      37.34
3	$      40.00	0.9019	$      36.08
4	$      40.00	0.8714	$      34.86
5	$      40.00	0.8420	$      33.68
6	$      40.00	0.8135	$      32.54
7	$      40.00	0.7860	$      31.44
8	$      40.00	0.7594	$      30.38
9	$      40.00	0.7337	$      29.35
10	$      40.00	0.7089	$      28.36
11	$      40.00	0.6849	$      27.40
12	$      40.00	0.6618	$      26.47
13	$      40.00	0.6394	$      25.58
14	$      40.00	0.6178	$      24.71
15	$      40.00	0.5969	$      23.88
16	$      40.00	0.5767	$      23.07
17	$      40.00	0.5572	$      22.29
18	$      40.00	0.5384	$      21.53
19	$      40.00	0.5202	$      20.81
20	$      40.00	0.5026	$      20.10
21	$      40.00	0.4856	$      19.42
22	$      40.00	0.4692	$      18.77
23	$      40.00	0.4533	$      18.13
24	$      40.00	0.4380	$      17.52
25	$      40.00	0.4231	$      16.93
26	$      40.00	0.4088	$      16.35
27	$      40.00	0.3950	$      15.80
28	$      40.00	0.3817	$      15.27
29	$      40.00	0.3687	$      14.75
30	$      40.00	0.3563	$      14.25
31	$      40.00	0.3442	$      13.77
32	$      40.00	0.3326	$      13.30
33	$      40.00	0.3213	$      12.85
34	$      40.00	0.3105	$      12.42
35	$      40.00	0.3000	$      12.00
36	$      40.00	0.2898	$      11.59
37	$      40.00	0.2800	$      11.20
38	$      40.00	0.2706	$      10.82
39	$      40.00	0.2614	$      10.46
40	$      40.00	0.2526	$      10.10
41	$      40.00	0.2440	$         9.76
42	$      40.00	0.2358	$         9.43
43	$      40.00	0.2278	$         9.11
44	$      40.00	0.2201	$         8.80
45	$      40.00	0.2127	$         8.51
46	$      40.00	0.2055	$         8.22
47	$      40.00	0.1985	$         7.94
48	$      40.00	0.1918	$         7.67
49	$      40.00	0.1853	$         7.41
50	$      40.00	0.1791	$         7.16
51	$      40.00	0.1730	$         6.92
52	$      40.00	0.1671	$         6.69
53	$      40.00	0.1615	$         6.46
54	$      40.00	0.1560	$         6.24
55	$      40.00	0.1508	$         6.03
56	$      40.00	0.1457	$         5.83
57	$      40.00	0.1407	$         5.63
58	$      40.00	0.1360	$         5.44
59	$      40.00	0.1314	$         5.26
60	$      40.00	0.1269	$         5.08
60	$ 1,000.00	0.1269	$    126.93
Bond Price	$ 1,124.72

YTC is the Rate at which PV of Cash inflows are equal to Bond Price. when the bond is called.

Period	CF	[email protected]%	Disc CF	PVF @3%	Disc CF
0	$ -1,124.72	1.0000	jeff jeffy Next > < Previous Related Solutions B. A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at... B. A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1100. The bond currently sells at a yield to maturity (YTM) of 7% (3.5% per half-year). What is the yield to call? How does it relate to the YTM? Why?    A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a... A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7% APR , compounded semi-annually. What is the yield to call (annualized). A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a... A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,020. The bond currently sells for $1,059.34. a) What are the yield to maturity and the yield to call of the bond? b) What would be the yield to call annually if the call price were only $970? c) What would be the yield to call annually if the call price were $1,020, but the bond could be called in two... A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a... A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,020. The bond currently sells for $1,059.34. a) What are the yield to maturity and the yield to call of the bond? b) What would be the yield to call annually if the call price were only $970? c) What would be the yield to call annually if the call price were $1,020, but the bond could be called in two... A 30-year-maturity, 8 percent coupon bond paying coupons semiannually is callable in five years at a... A 30-year-maturity, 8 percent coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7 percent (3.5 percent per half-year). a. What is the yield to call? b. What is the yield to call if the call price is only $1,050? c. What is the yield to call if the call price is $1,100, but the bond can be called in two years in-stead... A 30-year maturity, 8.9% coupon bond paying coupons semiannually is callable in five years at a... A 30-year maturity, 8.9% coupon bond paying coupons semiannually is callable in five years at a call price of $1,145. The bond currently sells at a yield to maturity of 7.9% (3.95% per half-year). a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.)       Yield to call % b. What is the yield to call if the call price is only $1,095? (Do not round intermediate calculations. Round your answer... A 13 year maturity, 10% coupon bond paying coupons semiannually is callable in 8 years at... A 13 year maturity, 10% coupon bond paying coupons semiannually is callable in 8 years at a call price of $1,225. The bond currently sells at a yield to maturity of 9%. (Do not round answers) A.) What is the yield to call? B.) What is the yield to call if the call price is $1,175? C.) What is the yield to call if the call price is $1,225, but can be called in 4 years instead of 8? A 10-year maturity, 7.5% coupon bond paying coupons semiannually is callable in five years at a... A 10-year maturity, 7.5% coupon bond paying coupons semiannually is callable in five years at a call price of $1,200. The bond currently sells at a yield to maturity of 5% (2.5% per half-year). a. What is the yield to call annually? (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. What is the yield to call annually if the call price is only $1,150? (Do not round intermediate calculations. Round your answer to 3 decimal... -A 15-year maturity, 8% coupon bond is callable in 5 years at a call price of... -A 15-year maturity, 8% coupon bond is callable in 5 years at a call price of $1,050. The bond currently sells at yield to maturity of 7% a-    What is the yield to call ? b-    What is the yield to call if the call price is only $1000 c-     What is the yield to call if the call price is $1050, but the bond can be called in 2 years instead of 5 ? An 8%, 8-year bond pays annual coupons and has 5 years to maturity. If the market... An 8%, 8-year bond pays annual coupons and has 5 years to maturity. If the market interest rate is 9%, calculate the value of the bond. Show the (condensed) time line and key steps of two methods. For the NS method, show the abbreviated equation/expression. ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions Based on the loanable funds theory, explain how each of the following changes should impact interest... research paper: each student will be responsible for writing an argumentative research paper discussion a topic... In java based on the classes provided finish the program per the requirements: ----------------------------------------------Class1 package cardgame;... Identify two cultures and analyze the nurturing process within each culture and discuss the impact the... Digital security is an increasing concern is the Internet age. In order to protect sensitive information... the challenges experienced by companies considering full application of customer retention strategy in the face of... Respond to the following in a minimum of 175 words: The flow of a program is... ADVERTISEMENT About @ 2020 WizEdu