In: Finance
A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 5 years at $1,181.54, and currently sell at a price of $1,325.03. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % What return should investors expect to earn on these bonds?
-Select-IIIIIIIVItem 3 |
Investors would expect the bond to be called and earn the YTC because YTC is less than YTM |
Answer IV |