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Zippen Industries 9.250% bonds mature August 2, 2028. The bond is callable August 2, 2019 at...

Zippen Industries 9.250% bonds mature August 2, 2028. The bond is callable August 2, 2019 at 5.125 call premium. The offer on the bond to settle August 2, 2015 is currently 107.884

The Yield to Maturity is %

and the Yield to Call is %

Expert Solution

YTM is calculated using YIELD function in Excel :

settlement = August 2, 2015 (current date)

maturity = August 2, 2028 (redemption date)

rate = 9.250% (coupon rate)

pr = 107.884 (current price per $100 of face value)

redemption = 100 (redemption value)

frequency = 1 (number of coupon payments per year)

YTM = 8.24%

YTC is calculated using YIELD function in Excel :

settlement = August 2, 2015 (current date)

maturity = August 2, 2019 (call date)

rate = 9.250% (coupon rate)

pr = 107.884 (current price per $100 of face value)

redemption = 105.125 (call price = face value * (1 + call premium %) = 100 * (1 + 5.125%))

frequency = 1 (number of coupon payments per year)

YTC = 8.01%

jeff jeffy answered 8 hours ago

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