Question
In: Finance
1) RTE Inc. has 9% annual coupon bonds that are callable and have 18 years left...
1) RTE Inc. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $980.35. However, RTE Inc. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on RTE Inc.’s bonds?
|
Value |
|
|---|---|
| YTM | |
| YTC |
2) If interest rates are expected to remain constant, what is the best estimate of the remaining life left for RTE Inc.’s bonds?
10 years
18 years
5 years
13 years
3) If RTE Inc. issued new bonds today, what coupon rate must the bonds have to be issued at par? (9.23%, 8.55%, 6.05%, 7.93%)
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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