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A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...

A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1,146.32, and currently sell at a price of $1,269.54. 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.

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Expert Solution

Semi Annual Coupon =11%*1000/2 =55
Number of Periods =8*2 =16
Par Value =1000
Price of Stock =1269.54
YTM using financial Calculator
N=16;PMT=55;PV=-1269.54;FV =1000;CPT I/Y =3.31%
YTM =2*3.31% =6.62%

Semi Annual Coupon =11%*1000/2 =55
Number of Periods of Call=4*2 =8
Par Value =1000
Call Value =1146.32
Price of Stock =1269.54
YTM using financial Calculator
N=8;PMT=55;PV=1269.54;FV =-1146.32;CPT I/Y =3.2568%
YTC =2*3.2568% =6.51%

jeff jeffy answered 2 years ago
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