A 25-year bond with 5% yearly coupons has a 5.5% current yield. It called in seven years at a call price of $1025. Find the yield to call. 5.84% 6.42% 6.97% 5.42%
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- Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?Current Yield for Annual Payments Heath Food Corporations bonds have 7 years remaining to maturity. The bonds have a face value of 1,000 and a yield to maturity of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield?
- Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has a face value of $1,000 and a yield to maturity of 10.5883%. The bond pays coupons semiannually. What is the bond’s current yield?Yield to Maturity and Current Yield You just purchased a bond that matures in 5 years. The bond has a face value of 1,000 and an 8% annual coupon. The bond has a current yield of 8.21%. What is the bonds yield to maturity?Calculate the yield to maturity for a bond that has a $1,000 per value, 15 years to maturity, a 4% annual coupon, and currently sells for $990. Assume the bond is callable 2 years from today at a call price of $1,040. A. 4.09% B. 4.29% C. 4.53% D. 6.49%
- A $100 bond with annual coupons is redeemable at par at the end of 16 years. At a purchase price of $92 the yield rate is exactly 1% more than the coupon rate. Find the yield rate on the bond. A. 11.23 % B. 2.41 % C. 5.5 % D. 9.63 % E. 11.55 %Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the yield to maturity of the bond? 30% 0% 35.4% 100.2%Consider a 5 -year $ 1000 par value bond with 10% coupon paid annually. If the yield to maturity is7%, what is the duration? A) 10 years B) 5.00 years C) 4.22 years D) 3.37 years E) 2.61 years
- A $1,000 face value bond has 15 years to maturity and a 7.6% coupon rate (interest is paid annually). If the price of the bond is $1,094.62, what is the yield to maturity? Group of answer choices 8.10% 9.22% 6.59% 4.83%The market price of a three-year 4% annual-coupon bond is 946.54. If the YTM remains unchanged after you purchase the bond, what is the expected return if you hold the bond for one year? 6% 5.56% 4.14%A 1,000 bond with annual coupon is redeemable at par at the end of 10 years at a purchase price of 920 the yield rate is exactly 1% more than the coupon rates. Find the yield rate on the bond.
