Question

Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075 and it sells for $1,180. What is the bond's nominal yield to maturity? What is the bond's nominal yield to call? Would an investor be more likely to earn the YTM or the YTC? What is the current yield? Is this yield affected by whether the bond is likely to be called? What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, if reqired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign. Is this yield dependent on whether the bond is expected to be called?

Answer 1