question archive A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100
A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100
Subject:FinancePrice: Bought3
A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7% (3.5% per half-year). a.What is the yield to call
Please explain how to get CAN YOU SHOW THE WORK?
The bond sells for $1,124.72 based on the 3.5% yield to maturity.
[n = 60; i = 3.5; FV = 1000; PMT = 40]
Therefore, yield to call is 3.368% semiannually, 6.736% annually.
[n = 10 semiannual periods; PV = Ac€?o1124.72; FV = 1100; PMT = 40]
